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HomeMy WebLinkAbout2021/01/11 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA JAN. 11, 2021 All meetings of the St. Louis Park City Council will be conducted by telephone or other electronic means starting March 30, 2020, and until further notice. This is in accordance with the local emergency declaration issued by the city council, in response to the coronavirus (COVID-19) pandemic and Governor Walz's “Stay Safe MN” executive order 20-056. Some or all members of the St. Louis Park City Council will participate in the Jan. 11, 2021 city council meeting by electronic device or telephone rather than by being personally present at the city council's regular meeting place at 5005 Minnetonka Blvd. Members of the public can monitor the meeting by video and audio at https://bit.ly/watchslpcouncil or by calling +1-312-535-8110 meeting number (access code): 372 106 61 for audio only. Cisco Webex will be used to conduct videoconference meetings of the city council, with council members and staff participating from multiple locations. 6:30 p.m. – STUDY SESSION Discussion items 1. 6:30 p.m. Annual TIF district management report 2. 7:30 p.m. Long term funding of Climate Action Plan 3. 8:30 p.m. Future study session agenda planning and prioritization 8:35 p.m. Communications/updates (verbal) 8:40 p.m. Adjourn Written reports 4. Application for Tax Increment Financing Assistance – Texa-Tonka Apartments 5. Home -based businesses 6. 2021 legislative issues and priorities 7. 2022 Pavement Management update - West Fern Hill (4021-1000) The agenda is posted on Fridays on the official city bulletin board in the lobby of city hall and on the text display on civic TV cable channel 17. The agenda and full packet are available by noon on Friday on the city’s website. If you need special accommodations or have questions about the meeting, please call 952 -924-2525. Meeting: Study session Meeting date: January 11, 2021 Discussion item : 1 Executive summary Title: Annual TIF district management report Recommended action: No formal action required. This is an annual update. Policy consideration: •Does the city council/EDA have any questions or concerns regarding the status of the tax increment financing (TIF) districts within the city? •Does the city council/EDA continue to support capturing a portion of tax increment generated by the districts to utilize for qualified affordable housing uses associated with the city’s affordable housing trust fund? •Does the city council/EDA support seeking special legislation to provide the city with greater flexibility on the use of TIF funds to further facilitate the creation and preservation of affordable rental and owner-occupied housing? •Is there additional information would be helpful for the city council/EDA regarding the city’s TIF districts? Summary: For many years, staff along with representatives from Ehlers, the city’s/EDA’s financial consultant, have presented the city council/EDA with an annual report regarding the financial status and management of the city’s TIF districts. Stacie Kvilvang, with Ehlers, and staff will be discussing the attached report with the city council/EDA at a high leve l. The purpose of the report is to review the status, financial condition, debt management and future value of the city’s tax increment districts. Information contained in the report is obtained from various sources, including, but not limited to: the City of St. Louis Park, Hennepin County, State of Minnesota, Office of the State Auditor and Ehlers. Information in the report is used by staff throughout the year to provide a quick reference guide when performing analyses and making recommendations to the city council/EDA. The report also describes the revenues generated from each TIF district and presents recommendations to consider, including the capture of tax increment for qualified affordable housing uses associated with the city’s affordable housing trust fund and the pursuit of special legislation to provide the city with greater flexibility on the use of TIF funds to enable the creation of additional affordable rental and owner-occupied housing. Financial or budget considerations: A portion of increme nt in a number of existing TIF districts is being captured to advance the city’s strategic goal of increasing and maintaining the city’s supply of affordable housing. By annually updating the information contained in the report, staff has an accurate reference resource when analyzing data or preparing financial information to ensure a comprehensive picture for the city council, EDA or end users of information. Strategic priority consideration: St. Louis Park is committed to providing a broad range of housing and neighborhood oriented development. Supporting documents: Annual TIF district management review and analysis report Prepared by: Greg Hunt, economic development coordinator Reviewed by: Karen Barton, community development director Approved by: Tom Harmening, city manager, EDA executive director January 2021 TIF DISTRICT MANAGEMENT REVIEW & ANALYSIS: City of St. Louis Park, MN Prepared by: Ehlers 3060 Centre Pointe Drive Roseville, Minnesota 55113 BUILDING COMMUNITIES. IT’S WHAT WE DO. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 2 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 2 Table of Contents Management Review and Analysis ................................................................................................................... 4 OVERVIEW ....................................................................................................................................................................................... 4 TIF DISTRICT SUMMARY ................................................................................................................................................................ 5 OBLIGATIONS OF THE TIF DISTRICTS ........................................................................................................................................ 9 TIF FOR AFFORDABLE HOUSING .............................................................................................................................................. 16 IMPACT OF DECERTIFIED TIF DISTRICTS ................................................................................................................................ 18 ASSUMPTIONS ............................................................................................................................................................................... 19 RECOMMENDATIONS ................................................................................................................................................................... 20 Tax Increment Financing Districts ................................................................................................................. 24 VICTORIA PONDS ......................................................................................................................................................................... 24 PARK CENTER HOUSING ............................................................................................................................................................. 27 ZARTHAN AVENUE/16TH STREET ............................................................................................................................................. 33 MILL CITY ........................................................................................................................................................................................ 39 PARK COMMONS ........................................................................................................................................................................... 44 WOLFE LAKE ................................................................................................................................................................................. 50 AQUILA COMMONS ...................................................................................................................................................................... 55 ELMWOOD VILLAGE .................................................................................................................................................................... 61 HIGHWAY 7 CORPORATE CENTER ........................................................................................................................................... 71 WEST END ...................................................................................................................................................................................... 76 ELLIPSE ON EXCELSIOR .............................................................................................................................................................. 83 HARDCOAT .................................................................................................................................................................................... 90 ELIOT PARK .................................................................................................................................................................................... 94 THE SHOREHAM ............................................................................................................................................................................ 99 4900 EXCELSIOR ........................................................................................................................................................................ 105 WAYZATA BOULEVARD (PLATIA PLACE) ............................................................................................................................ 110 ELMWOOD APARTMENTS ......................................................................................................................................................... 113 WOODDALE STATION ............................................................................................................................................................... 117 BRIDGEWATER BANK ................................................................................................................................................................ 122 Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 3 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 3 PARKWAY RESIDENCES ............................................................................................................................................................ 126 City Map of the TIF Districts .......................................................................................................................... 130  Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 4 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 4 Management Review and Analysis OVERVIEW Tax increment is a financing tool authorized by state law, that allows an authority to capture and use most of the increased local property tax revenues from new development within a defined geographic area for a defined period of time. In general, tax increment revenues are used to pay for eligible project costs which encourage creation or retention of jobs, redevelop blighted areas or polluted sites and construction of affordable housing. Revenue from tax increment financing (TIF) districts is a financial asset of the City of St Louis Park. This revenue tool allows the City to address blight, contamination, housing or redevelopment needs for the parcels in the TIF district for a specified period of time. The revenue generated is first used to pay debt service on outstanding bonds, interfund loans and developer pay-as-you-go notes (PAYGO). A portion, but not all, of the remaining revenues can be used to participate in other eligible development projects and City initiatives. Over the years, the City utilized unobligated revenues from older TIF districts to complete the following projects:  Park Commons property assembly and public improvements  Excelsior Boulevard streetscape improvements  Excelsior Boulevard bridge improvements  Reilly tar clean-up activities  Highway 7 and Louisiana Avenue storm water intersection improvements  Louisiana Court Rehabilitation  Erv’s Garage redevelopment  Bikemasters (Construction Assistance Program)  Hardcoat (Construction Assistance Program)  Home Hardware Store (Construction Assistance Program)  Projects related to Southwest Light Rail Transit (SWLRT)  Fiber optic infrastructure  The Quentin Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 5 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 5 The factors that produce tax increment revenues change every year. At the same time, the state property tax laws have changed significantly since 1997, including the major reforms enacted in 2001. Despite reductions in revenue due to the reform, the City has more than adequate cash flow to pay for all outstanding general obligation tax increment bonds. A few of the TIF districts for which project costs were paid through a developer financed PAYGO will be fully paid by the end term of the obligations. Overall, the City has no obligation to make up shortfalls for these PAYGO notes, since they are revenue-based notes and the risk is borne by the developer. In addition to property tax reform of 2001, significant changes enacted by the Legislature in 1990 have changed the way that cities can utilize TIF for development. The Office of the State Auditor (OSA) has a TIF division which is mandated by state law to collect annual reporting forms and, if necessary, audit the use of TIF. Such audits could result in a letter to the county attorney or attorney general for enforcement actions. To date the City has not been audited. Due to legislative and market changes and oversight of TIF districts by the OSA, the management of the City’s TIF districts is an ongoing activity. Ehlers worked with City staff to create the following plan for the management of its TIF districts and their related obligations. TIF DISTRICT SUMMARY Currently the City has one inactive district (Victoria Ponds) and nineteen active TIF districts, and one HSTI District (Hwy 7 Corporate Center). Overall, the makeup of the types of districts is as follows: These districts are outlined in the charts that follow on the next pages. A more detailed explanation of each district can be found starting on page 24. Type of DistrictNumberEconomic Development 1 Housing2 HSTI Sub District 1 Redevelopment 16Renovation and Renewal1 TOTAL 21*  Actual number is 20 districts as the HSTI district is a subdistrict Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 6 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 6 VictoriaParkZarthan/ MillParkPondsCenter16th AvenueCityCommonsDistrict TypeRedevelopmentHousingRedevelopmentRedevelopment Redevelopment RedevelopmentProject/Costs Financed72 twin home units and part of the Hutchinson Spur trail. Financed $760,000 soil corrections and remediation and $700,000 of City costs for trail improvements91 units of senior assisted living rental housing. Financed $500,000 land acquisitionTwo hotels developed by CSM and 86 townhome units built by Rottlund. Financed $3,945,000 land acquisition and site improvements200 rental housing units developed by MSP Real Estated. Financed $3,531,900 developer site costs.Excelsior and Grand retail, office and rental housing and condos developed by TOLD. Financed $3.5M in public improvements and $15.55M in site and parking ramp costsTwo office/commercial buildings consisting of 65,000 s.f. developed by Beltline Industrial Park, Inc. Financed $996,000 soils and site condition costs.Approved4/1/199610/7/199612/20/19993/20/20001/16/20017/7/2003Legal max term12/31/202312/31/202312/31/202612/31/202612/31/202712/31/2031Anticipated termDecertified12/31/202312/31/202612/31/202612/31/202712/31/2031First Increment199819982001200120022006Current ObligationsNone None$1,101,362 PAYGO Note 1    $1,448,088 PAYGO Note 2 and                        $1,395,547 PAYGO Note 3$3,531,853 PAYGO Note$3,145,046 interfund loan $3,500,000 Phase I PAYGO Note, $3,300,715 Phase E PAYGO Note, $4,668,633 Phase NE PAYGO Note, $4,079,105 Phase NW PAYGO Note$996,000 PAYGO NoteOther Obligations$400,000 for ERV's garage redevelopment$500,000 Loan to Lousisana Ct to buy down bondsNoneNoneNoneNoneContruction Assistance Program (CAP) Funding$500,000 for Hardcoat (former Flame Metals property. Portion will be repaid from new ED TIF district) and $25,000 to CAR Properties LLC (former Home Hardware Store)None None$70,000 to CKJ Properties (former Bikemasters property)None None2020 Est TIF RevenueN/A$182,944$560,238$595,478$2,784,729$155,628Fiscal DisparitiesA (outside)A (outside)B (inside)B (inside)A (outside)B (inside)County Number130313041305/1306130713081310CategoryWolfe LakeStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 7 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 7 AquilaElmwoodHighway 7 CorporateEllipse on CommonsVillageCenter & HSTIExcelsiorDistrict TypeHousingRenewal and RenovationRedevelopment and Hazardous Substance SubdistrictRedevelopmentRedevelopment Economic Development RedevelopmentProject/Costs Financed122 unit limited equity senior cooperative developed by Stonebridge. Financed approximately $1,000,000 land acquisition costs.Rottlund ‐ 224 townhomes and condos near Wooddale and Highway 7. Financed approximately $790,000 in site and land costs.    Hoigaards ‐ 74 condos over 25,000 sq/ft of retail, 220 apartments.  Financed $3,495,000 and $935,000 in 2010 TIF revenue bonds for site and land costs.  100 sr. apartmenst and 22 town homes.  Financed $1M in site and land costs.    Grecco ‐ 115 senior rental units over 10,000 sq/ft of retail.  Financed $490,000 in site and land costs.Created to provide funding to clean up and cap contaminated land and the subsequent construction of a 78,000 s.f. multi tenant office/warehouse buildingMajor mixed use redevelopment (office, retail, hotel, entertainment, housing, hotel) developed by Duke Realty. Financed $21,100,000 site costs and up to $5,000,000 City public improvements Ellipse I ‐ 132 Market Rate Apartments and 16,000 s.f. commercial and Ellipse II ‐ 58 Units of MarketRrate ApartmentsAcqisition and renovation of a 33,600 sq/ft manufacturing facility and construction of 1,500 sq/ft of officeRedevelopment of the Eliot School site into 138 market rate apartments and 2 single-family homesApproved9/7/20048/2/20045/15/200611/19/20072/2/200912/20/20105/6/2013Legal max term12/31/203212/31/202912/31/203212/31/203612/31/203612/31/202212/31/2041Anticipated term12/31/203212/31/202912/31/202712/31/203612/31/203612/31/202212/31/2041First Increment2007200720072011201120142016Current Obligations$1,050,000 PAYGO NoteHoigaards ‐ 2010A TIF Revenue Bonds ‐ $3,495,000, 2010B TIF Revenue Bonds ‐ $935,000, Adagio-$820,000 PAYGO Note, and Medley- $200,000 PAYGO Note                           Grecco - $490,000 PAYGO and IFL ‐ $3,298,200 PAYGO Notes - Note A $2,100,000 Note B $360,000 Note C $72,000 and Note D $23,000$21,100,000 - PAYGO and 2008B GO Tax Increment Bonds$686k Ellipse II Paygo Interfund Loan from Development Fund$115,000 Interfund Loan from Victoria Ponds TIF District$1.1 Million PAYGO NoteOther ObligationsNone None None None None None NoneContruction Assistance Program (CAP) FundingNone None None None None None None2020 Est TIF Revenue$228,980$2,196,695$144,722$2,746,899$700,701$27,854$471,422Fiscal DisparitiesB (inside)B (inside)B (inside)B (inside)B (inside)B (inside)B (inside)County Number1311131213131314131513161318/1319Eliot ParkHardcoatWest EndCategory Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 8 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 8 District TypeRedevelopment Redevelopment Redevelopment Redevelopment RedevelopmentRedevelopmentRedevelopmentProject/Costs FinancedRedevelopment of 5 parcels into 148 apartments with 20% of the units affordable at 50% of the AMI and 20,000 sq/ft of retail/office spaceRedevelopment of the former Bally's site into 164 apartments with 10% of the units affordable at 60% of AMI and a 28,000 sq/ft grocery storeRedevelopment of 2 parcels into a 100 room hotel and 149 unit apartment and/or office buildingRedevelopment of 1 parcel into 70 agre restricted apartment units with 20% of units reserved for 60% of AME and 4,400 sq/ft of retailRedevelopment of 10 parcels into a 110-room hotel, 299 apartment units (200 affordable units) and 16,261 sq/ft retail, 10,800 sq/ft e-generation facility and structured parkingRedevelopment of 3 parcels into the Headquarters for Bridgewater Bank (38,967 sq/ft), Bank Facility (7,152 sq/ft ), 19,775 sq/ft of office and 7,530 sq/ft of retailRedevelopment of 6 parcels into a 95-unit market rate apartmentApproved8/17/201511/16/20153/21/20165/15/20175/1/20177/16/20185/18/2020Legal max term12/31/204312/31/204412/31/204612/31/204412/31/204512/31/204512/31/2047Anticipated term12/31/204312/31/204412/31/204612/31/204412/31/204512/31/204512/31/2047First Increment2018201820202019201920202022Current Obligations$1.2 Million PAYGO Note$2.6 Million PAYGO Note$714,000 Hotel Note - PAYGO and $2,760,000 Apartment Note ‐ PAYGO     $950,000 PAYGO Note$5,660,000 PAYGO Note$950,000 PAYGO Note$3,350,000 PAYGO NoteOther ObligationsNone None None None None None NoneContruction Assistance Program (CAP) FundingNoneNoneNoneNoneNoneNoneNoneN/A$539,064$665,098$0N/AN/AN/AN/AFiscal DisparitiesB (inside)B (inside)B (inside)B (inside)B (inside)B (inside)B (inside)County Number1320132113221323132413251326Parkway ResidencesThe Shoreham 4900 Excelsior Wayzata Blvd Bridgewater BankElmwood Apts Wooddale StationCategory Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 9 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 9 OBLIGATIONS OF THE TIF DISTRICTS The revenues from these districts are largely site specific, meaning that the revenues are restricted by law and by contract with the developers. The revenues must be used primarily to address blight, contamination, housing or redevelopment needs for the parcels in the TIF district within a specified period of time. The City has the following obligations outstanding (after the August 1, 2020 bond and PAYGO payments were made): Summary of Outstanding Obligations (after the 8/1/2020 payment) DistrictNoteOutstanding After 8/1/2020Total By TIF DistrictIssueAmount Paying District TermNote A746,675$                2008B GO Tax Increment Bonds2,100,000$ West End2/1/2024Note B 128,002$                2010A Tax Increment Revenue Bonds - Hoigaards 1,015,000$ Elmwood2/1/2023Note C 81,169$                  TOTAL5,385,635$ N/AN/ANote D 25,929$                  Excelsior & Grand 1,446,582$            Phase NE 4,469,153$            Phase E 4,100,193$            Phase NW 4,249,079$            Mill CitySLP Apts3,034,559$            3,034,559$ CSM Note 11,218,476$            CSM Note 21,750,836$            Rottlund Note 3471,512$                West EndDuke Realty20,909,528$          20,909,528$ The ShorehamBader Development124,609$                124,609$ 4900 ExcelsiorWeidner2,264,181$            2,264,181$ 714,000$                2,760,000$            Wooddale StationPLACE5,660,000$            5,660,000$ Elmwood Apartments36th Street LLC950,000$                950,000$ Bridgewater BankBridgewater Bank950,000$                950,000$ Pakway ResidencesSela Investments LLC3,350,000$            3,350,000$ TOTAL 59,404,483$ Zarthan3,440,825$ Bonds After 8/1/2020Pay As You Go ObligationsHwy 7 Corporate Center $ 981,775 Park Commons14,265,007$ Wayzata BoulevardPlatia Place - SLP Park Ventures LLC3,474,000$ Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 10 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 10 Construction Assistance Program In 2009, the Legislature passed the JOBS Bill and extended it for one year as part of the 2010 legislative session. One element of this was the temporary authority to stimulate construction. This portion of the legislation allowed cities to utilize cash balances in existing TIF districts (not needed to pay debt service on outstanding obligations) to spur new construction or substantial rehabilitation of private buildings and ancillary facilities, if construction commenced by July 1, 2012 and the dollars expended by December 31, 2012. On July 19, 2010, the EDA approved a Construction Assistance Program (CAP) and at a public hearing, adopted the required Spending Plan. The TIF districts that utilized funding for CAP were:  Victoria Ponds  Park Center Housing  CSM  Mill City  Edgewood  Wolfe Lake  Aquila Commons  Elmwood Village (Rottlund portion of TIF only) Three projects were funded through the CAP program – Hardcoat (former Flame Metals building), CKJ Properties LLC (former Bikemasters building) and CAR Properties LLC (former Home Hardware Store). The EDA provided $500,000 to Hardcoat to purchase and renovate the former Flame Metals property within the City. Hardcoat renovated the building and site, constructed a small addition, and relocated its operations there. The existing industrial building is approximately 33,600 square feet and was constructed in 1963. Both the interior and exterior had numerous building code deficiencies. Following Flame Metals’ departure in 2009, the building’s interior was emptied, thoroughly cleaned, repainted, and code deficiencies were addressed. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 11 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 11 The project includes a complete renovation of both the interior and exterior of the building and an addition on the north side of the building. Renovation included a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens and site amenities, as well as the construction of a 1,500 SF addition for office/conference space. Hardcoat initially occupied approximately 25,000 square feet of the building. The balance has been leased to a complementary business and will provide Hardcoat with future expansion capacity. The $500,000 in funding for this project came from the Victoria Ponds TIF district. In addition, the EDA created an economic development TIF district on December 20, 2010 for the project to repay as much of the CAP funds back to this district. The EDA provided $70,000 to CKJ Properties LLC from the Mill City TIF District to renovate the former Bikemasters building within the City. The 18,000 s.f. building, constructed in 1950 was neglected and fell into disrepair. As a result, the building sustained damage due to lack of maintenance and vandalism. The building went into foreclosure in 2009 year and was purchased in September 2010 by CKJ Properties LLC. The project includes a complete renovation of both the interior and exterior of the building. Renovation included new windows and doors, new bathrooms, new flooring and carpeting, new ceilings, new electrical and plumbing systems, new energy efficient HVAC equipment, new dock doors and downspouts, as well as interior and exterior painting, landscaping, parking lot resurfacing and striping, and screening of outdoor dumpsters. The property is currently leased to six (6) office tenants. The City provided $25,000 to CAR Properties LLC. to renovate the former Home Hardware Store. The building is located in the historic Walker Lake area near the intersection of Wooddale and West Lake Street. It was originally constructed in the 1950’s within a strip of commercial buildings and had always been a hardware store. Despite its use as a former hardware store, the building was neglected for some time. CAR Properties made the required repairs and renovated the building. Renovation included a new roof, front window, energy efficient HVAC equipment, as well as remodeling the bathroom and making other various repairs to make the building code compliant. Upon renovation the property was leased to another commercial tenant. The $25,000 in funding for this project came from the Victoria Ponds TIF District. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 12 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 12 TIF as a Development Tool Continuous redevelopment is vital to maintaining the City’s long-term economic health and vitality. St Louis Park has judiciously utilized TIF for key redevelopment and housing projects since 1972 when the Oak Park Village TIF District was established. Utilizing this tool to accomplish the various community development goals of the City has optimized land uses, strengthened the tax base, diversified housing options, while cleaning up contaminated sites and increasing employment opportunities. One immediate benchmark of the benefit of utilizing TIF is the overall increase in market value from when the district was created to when it is fully developed and aging. As indicated in the following table, the overall market value of the City’s TIF district portfolio has increased by over 1100%:   DistrictCounty District NumberOriginal Market ValuePay 2020 Taxable Market ValuePercent Increase in ValuePark Center1304493,00012,740,0002584.18%Zarthan1305 and 1306 4,053,600 46,186,7981139.40%Mill City1307708,70040,000,0005644.14%Park Commons13084,618,000 210,329,509 4554.56%Edgewood13091,000,000 5,025,000502.50%Wolfe Lake13101,717,300 11,460,000667.33%Aquila13111,900,000 21,855,9531150.31%Elmwood131210,864,500 182,815,489 1682.69%Highway 7 Business Center13132,792,700 8,844,000316.68%West End (Partial Construction)131443,051,000 264,167,400613.62%Ellipse 13151,931,800 53,898,0002790.04%Hardcoat13161,184,700 2,867,000142.00%Eliot Park 1318/13192,143,000 33,586,3001567.26%The Shoreham 13202,476,200 42,224,0001705.19%4900 Excelsior (Partial Construction)13212,404,000 46,051,0001915.60%81,338,500 982,050,449 1107.36%Wayzata Boulevard 13222,331,000 2,632,0000.00%Elmwood Apartments 13231,100,000 1,100,0000.00%Wooddale Station13245,811,900 5,811,9000.00%Bridgewater Bank 13253,772,400 3,772,4000.00%Parkway Residences13263,006,600 3,006,6000.00%TOTALN/AN/AN/ANote:  % increase in value excludes the 5 districts where construction hasn't commenced or value realizedStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 13 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 13 Due to the age of the City, the majority of the TIF districts created are redevelopment districts which have a 26-year term. However, most of the City’s Districts do not extend to the entire term as noted in the chart below: DistrictYear Established Term of District# of Years of TIF Based Upon Obligation Being Paid OffDifferenceZarthan19992622‐4Mill City20002622‐4Park Commons200126260Edgewood200320211Wolfe Lake20032614‐12Aquila20042612‐14Elmwood Village200426260Highway 7 Business Center20062622‐4West End (Partial Construction)20072620‐6Ellipse 20092610‐16Hardcoat2010990Eliot Park 2013265‐21The Shoreham 2015262‐244900 Excelsior 2015268‐18Wayzata Boulevard (No construction yet)2016269‐17Elmwood Apartments 2017268‐19Wooddale Station (Under construction)20172615‐11Bridgewater Bank 20172611.5‐14.5Parkway Residences (No construction yet)20202615.0‐11.0AVERAGEN/A24.7914.58‐10.21AVERAGE LAST 10 YEARSN/A24.119.11‐15.00AVERAGE LAST 5 YEARSN/A26.0010.20‐15.80 As noted, since 1999, the average term of the TIF districts is approximately 14.5 years. In the last 5 years, the average has declined to approximately 10 years. While there are undoubtedly many benefits to utilizing TIF as a development tool, cities still wonder if they are utilizing the tool too much or not enough. One good way to measure a city’s use of TIF is to compare the use of TIF with similar cities. A common measure of the use of TIF is the percentage of the gross tax base captured in TIF districts. Below is a chart which demonstrates the City’s current and projected tax base, which is captured in TIF districts with similar cities, as shown on the following page. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 14 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 14 City of St. Louis ParkProjected Captured TIF Tax Capacity and Comparison with Other CitiesCity of St. Louis Park2016 2017 2018 2019 20202021 2022 2023 2024 2025Park Center-1304 116,765 133,828 139,228 144,515 150,890 152,399 153,923 155,46200Zarthan-1305/1306366,255 377,405 408,163 419,982 467,481 472,156 476,877 481,646 486,463491,327Mill City-1307362,326 424,401 453,641 466,141 491,141 496,052 501,013 506,023 511,083516,194Park Commons-13081,883,220 2,277,376 2,230,111 2,327,335 2,406,018 2,430,078 2,454,379 2,478,923 2,503,712 2,528,749Edgewood-130954,178 51,923 49,321 50,117000000Wolfe Lake-1310110,708 106,605 110,527 121,173 129,144 140,896 153,718 167,706 182,967199,617Aquila Commons-1311146,560 159,581 170,473 184,737 201,109 203,120 205,151 207,203 209,275 211,368Elmwood-13121,524,465 1,621,959 1,725,298 1,765,394 1,975,041 1,994,791 2,014,739 2,034,887 2,055,236 2,075,788Highway 7 Business Center-1313 94,441 91,015 78,272 79,537 81,904 82,723 83,550 84,386 85,230 86,082Highway 7 Subdistrict-131353,504 53,504 53,504 53,504 53,504 54,039 54,579 55,125 55,676 56,233West End-13141,572,217 2,084,801 2,114,759 2,621,257 2,855,997 2,884,557 2,913,403 2,942,537 2,971,962 3,001,682Ellipse on Excelsior-1315444,092 535,561 546,235 620,639 652,232 711,585 776,339 846,986 924,0621,008,152Hardcoat-131617,093 16,887 19,314 19,626 22,974 23,204 23,436000Eliot Park-1318/131952,201 277,040 345,732 364,571 390,896 394,805 398,753 402,741 406,768 410,836The Shoreham - 13200301,653 482,482 444,609 449,055 453,546 458,081 462,662 467,2894900 Excelsior - 1321000 405,085 548,563 554,049 559,589 565,185 570,837 576,545Wayzata Blvd - 13220000 4,021 451,240 455,752 460,310 464,913 469,562Elmwood Apartments - 1323000 3,555000000Wooddale Station - 132400000 504,858 509,906 515,006 520,156 525,357Bridgewater Bank - 132500000 99,880 100,879 101,888 102,906 103,936Captured TIF Tax Capacity 6,798,025 8,211,886 8,746,231 10,129,650 10,875,524 12,099,487 12,289,533 12,464,093 12,513,907 12,728,716Total Tax Capacity (Gross) 71,733,485 77,974,751 82,002,664 88,770,448 96,057,628 104,798,872 114,335,570 124,740,106 136,091,456 148,475,779Percentage of Tax Base in TIF 9.5% 10.5% 10.7% 11.4% 11.3% 11.5% 10.7% 10.0% 9.2% 8.6%Assumes 1% annual increase in tax base and TIF beginning in payable 2021ProjectedActual Today, the City’s use of TIF is a bit higher compared to other first ring suburbs, however historically shorter terms of assistance in your TIF districts mitigates this. Overall, this amount of use is expected given that St Louis Park is fully developed, and portions are in need of redevelopment. The city has chosen to use TIF to achieve strategic priorities such as affordable housing. Also shown are comparable cities’ tax rates and bond ratings. Although this is a small sample of municipalities, the amount of TIF used by a City does not seem to correlate directly with a City’s tax rate or bond rating. In conversations with rating agencies, we do know that market value growth and redevelopment are important factors in maintaining St Louis Park’s AAA bond rating. Following is a table which demonstrates the historical market value growth of St. Louis Park. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 15 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 15 ComparableFinal Pay 2020CityCityCaptured TIF as a % of Tax Base City Tax Rate Bond RatingBrooklyn Park1.1%48.862%AA+Golden Valley2.1%53.400%AaaBloomington2.5%39.557%Aaa/AAAMinnetonka2.6%36.574%AaaEdina3.8%27.945%Aaa/AAAMinneapolis7.6%57.918%Aaa/AAARichfield8.5%53.292%Aa2New Brighton8.9%40.557%AAHopkins9.6%69.301%AA+St. Louis Park11.3%43.398%AAAFinal Pay 2020 Tax YearTaxable Percent ChangePayable Market Value From Prior Year20207,619,717,196 8.27%20197,037,442,189 8.50%20186,486,028,398 5.65%20176,138,955,694 8.47%20165,659,666,031 7.95%20155,242,685,184 6.68%20144,914,404,312 0.48%20134,891,018,550 -2.54%20125,018,306,562 -5.61%20115,316,617,000 -4.40%20105,561,557,200 -1.39% Tax YearCityPercent ChangePayableTax Rate From Prior Year202043.398-2.93%201944.706-7.06%201848.1014.11%201746.2000.01%201646.195-3.26%201547.754-1.68%201448.5700.71%201348.2285.60%201245.6725.54%201143.27611.44%201038.8341.06% The above two tables show the history for St Louis Park’s taxable market value and the City’s tax rate. Factors such as total general and debt levy needs, State law and economic factors will influence both the market value and the corresponding tax rate. A correlation cannot always be made when considering market value, tax rate and total tax capacity captured by tax increment districts. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 16 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 16 TIF FOR AFFORDABLE HOUSING The rules for utilizing TIF for affordable housing are complex. St. Louis Park has used TIF from several sources to assist affordable housing developments. The statutory authorities for each case are outlined below: 1. Special Pooling Provision for Tax-Credit Eligible Rental Housing. Minnesota Statutes, Section 469.1763, subdivision 2(d), allows the EDA/City to pool up to an additional 10% above the standard allowable limit for rental housing that meets low-income housing tax credit requirements (the projects do not need to receive tax credits, they just need to be tax credit eligible, meaning they are both rent and income restricted). These funds can be used to pay credit-eligible costs for tax credit eligible rental projects. Eligible uses include acquisition and site preparation, construction, rehabilitation and public improvements directly related to the housing, as long as these costs were not funded through tax credits (does not apply if all eligible expenses are funded through tax credits). The funds can be spent anywhere within the City and do not need to be located within a Project Area. The income and rent guidelines are defined as follows: Rental Housing: 20% of the units occupied by families at 50% of median income (20/50) or 40% of the units occupied by families at 60% of median income (40/60) and rents for all the income-restricted units must not exceed 30% of the applicable income limit For a redevelopment district the total pooling may be up to 35%. This pooling, pursuant to Minnesota Statutes, Section 469.176 subdivision 4k, can be done without regard to project area/development district limitations. The EDA/City would not implement this pooling until the obligations in the various TIF districts are paid off since typically 95% of the TIF is pledged to the obligation. 2. Pooling from Housing Districts. A housing district is established for either rental or owner-occupied housing. The rental housing developments are income limited to either 20% of the units at 50% or less of area median income, or 40% of the units at 60% or less of area median income, adjusted for family size. The owner-occupied housing is limited to 100% of area median income for families of two or less, or 115% for families of three or more. The rental housing restrictions remain for the life of the TIF district while the owner-occupied restrictions apply only to the first occupants. If excess funds from a housing district are realized, then 100% of the tax increment may be pooled for other housing projects that meet the income limitations listed above. This pooling can be done without regard to project area and development district limitations. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 17 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 17 Currently, the main tax increment sources, from which the City could fund affordable housing, are from Aquila and Park Center (housing), Wolfe Lake, Ellipse, Eliot Park and The Shoreham (redevelopment). In addition, the EDA anticipates making the additional 10% election to the Zarthan, Mill City, West End and 4900 Excelsior TIF Districts. These districts plus Wolfe Lake, Ellipse, Eliot Park and The Shoreham can be utilized in accordance with #1 above and Aquila and Park Center can be utilized in accordance with #2 above. The table below summarizes the amounts that could be available and as noted: Year Wolfe Lake Zarthan Mill City Ellipse Eliot Park Shoreham West End4900 Excelsior Yearly TotalCumulative2019‐                            2020 49,677           222,944            272,621            272,621               202149,683                224,639                    149,751                  424,073                    696,694                       202249,931                225,762                    150,500                  173,636                599,830                    1,296,524                    202350,181                193,502                   183,982                226,891                    151,252                  174,504                980,313                    2,276,837                    202450,432                194,470                   183,559                228,025                    152,009                  175,377                983,872                    3,260,709                                                202550,684                195,442                   184,477                229,166                    152,769                  176,254                988,792                    4,249,500                                                202650,937                196,419                   185,400                230,311                    153,533                  177,135                217,934                        1,211,670                5,461,170                    202751,192                ‐                        231,463                    154,300                  178,021                219,024                        834,000                    6,295,171                    202851,448                ‐                        232,620                    155,072                  178,911                220,119                        838,170                    7,133,341                    202951,705                233,783                    155,847                  179,805                221,220                        842,361                    7,975,702                    203051,964                234,952                    156,626                  180,705                222,326                        846,573                    8,822,275                    203152,224                236,127                    157,409                  181,608                ‐                               223,438                        850,806                    9,673,080                    2032237,308                    158,196                  182,516                1,031,338                   224,555                        1,833,913                11,506,993                  2033238,494                    183,429                1,036,495                   225,678                        1,684,095                13,191,088                  2034239,687                    184,346                1,041,677                   226,806                        1,692,516                14,883,604                  2035240,885                    185,268                1,046,886                   227,940                        1,700,978                16,584,582                  2036242,090                    186,194                1,052,120                   229,080                        1,709,483                18,294,065                  2037187,125                230,225                        417,350                    18,711,415                  2038188,060                231,376                        419,437                    19,130,852                  2039189,001                232,533                        421,534                    19,552,385                  2040189,946                233,696                        423,641                    19,976,027                  2041190,895                234,864                        425,760                    20,401,787                  2042191,850                236,039                        427,888                    20,829,675                  2043‐                            237,219                        237,219                    21,066,894                  TOTAL 610,058        779,834            737,418          3,955,148          1,847,265         3,834,586       5,208,515            4,094,071             21,066,894      Note:  Districtricts highlighted in grey have had budgets amended by the EDA to allow the additional pooling for housingPOOLING FOR AFFORDABLE HOUSINGShaded Areas Depict TIF District That Have Been Modified to Allfor For Additional 10% Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 18 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 18 IMPACT OF DECERTIFIED TIF DISTRICTS One frequent question we receive is what are the additional levy dollars the City can expect to receive from future TIF districts after they are decertified? As shown on Pages 6-9 in the District Summary Tables, the City will see the gradual decertification of six (6) TIF districts over the next ten (10) years, starting with Hardcoat on December 31, 2022. These districts, when decertified, will return value to the tax rolls for general taxing purposes, and the City will see a corresponding increase in its tax base. The District to provide the most benefit to the tax levy will be when Park Commons decertifies in 2027, which will provide an additional $1,044,164 in tax levy authority in 2028. The table below shows how much more the City could levy and still maintain a stable tax rate. City of St Louis ParkProjected Additional Tax Levy Dollars As A Result of Decertified TIF DistrictsTIF District2023 2024 2027 20282030Hardcoat22,974 Park Center150,890 Zarthan467,481 Mill City491,141 Park Commons2,406,018 Elmwood Village1,975,041 Total Annual Captured Net Tax Capacity Returned to Tax Rolls22,974 150,890 958,622 2,406,018 1,975,041 City Tax Rate for Taxes Payable in 2020 (1)43.398%Estimated Additional Annual Tax Levy Available (1)9,970$ 65,483$ 416,023$ 1,044,164$ 857,128$ (1) - Assumptions:- Calculates additional dollars the City could levy and still maintain the same tax rate as Pay 2020.- Assumes no change in existing tax base from prior year- Assumes no change in the Fiscal Disparities Distribution Dollars from Pay 2020Projected Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 19 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 19 ASSUMPTIONS Before discussing the recommendations of the current TIF analysis, it is important to understand the assumptions used in making these projections. 1. Fund Balances. Fund balances shown for debt service funds are based on actual audited amounts for December 31, 2019. 2. Tax Increment. Pay 2020 tax increment revenues are based upon Hennepin County receipts. 3. Projected Revenues. Projected revenues do not account for additional development (except the developments under a development agreement) or inflation/decrease of existing values. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 20 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 20 RECOMMENDATIONS The updated financial analysis of the City’s TIF Districts offers the following recommendations: 1. Pooling. Four of the redevelopment districts have cash balances within them due to funds not being fully utilized for administration or other projects within or outside the district. Following is a chart outlining four districts that have cash balances available for pooling as of December 21, 2020, after estimated paygo and bond payments due February 1, 2021. Staff recommends that the cash balances under redevelopment be utilized to pay for acquisition/demolition of blighted property, environmental remediation and/or public infrastructure costs associated with redevelopment. TIF District Cash Balances Currently Available for Legal Pooling DistrictDecember 21, 2020 Cash BalanceType of Project EligibleAfter estimated 2/1/2021 PaymentsZarthan329,571$                        Victoria Ponds 70,116$                          Mill City 107,885$                        West End 762,546$                         Total Redevelopment1,270,118$ Redevelopment Following is a chart outlining various districts projected to have some cash balances available for pooling at the end of their term. The balances in the chart on the following page are based on the projections, which include all obligations that have been issued and any current projects. The balances will change as future projects are identified and funded. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 21 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 21 TIF Balances Available For Legal Pooling at End of District, If Current Available Pooling Is Not Used DistrictEnd Date of ObligationCumulative Pooling Available for RedevelopmentType of Project EligibleVictoria Ponds2013130,175$            RedevelopmentZarthan2023607,617$            RedevelopmentMill City2019420,655$            RedevelopmentPark Commons20284,088,408$         RedevelopmentWolfe Lake2020116,000$             RedevelopmentEllipse2022624,766$             RedevelopmentAquila Commons2018385,841$             Affordable HousingWest End20313,202,276$         RedevelopmentHwy 7 Corporate Center 202722,264$               Redevelopment As noted, several of the TIF districts will have significant cash balances at the end of their term. In general, 20%-35% of tax increment may be used outside the boundaries of a TIF district in accordance with applicable law, which governs the amount and the purpose for which it can be used. The allowable amount and use are restricted based on TIF district type. In the detailed discussions of each TIF district that follows, there is a general description regarding the percent and the use allowable. 2. Use of Park Commons TIF after Interfund Loan (IFL) and Excelsior and Grand Notes are repaid. It is anticipated that the IFL will be repaid on February 1, 2021. Approximately $279,000/year was being applied to repayment on this obligation. Starting with the August 1, 2021 payment, this amount will be utilized on a prorated basis to repay the Phase Notes. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 22 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 22 3. Special Pooling Provision for Tax-Credit Eligible Rental Housing. We recommend that the EDA continue to modify the TIF plan budgets for its redevelopment TIF districts to allow for the additional 10% to be retained for affordable housing (total of 35%) and return the remaining 65% to the County for redistribution. We recommend that this be completed in the year (or year prior) to when the obligation(s) for the district(s) are going to be paid in full. The EDA/City has determined to utilize this authority from the following TIF districts: DistrictEnd Date of ObligationEnd Date of DistrictType of DistrictZarthan2022 2026Mill City2023 2026* Wolfe Lake2020 2031West End2031 2036* Ellipse2020 2036* Eliot Park2020 2041*The Shoreham2021 20434900 Excelsior2025 2044Wayzata BoulevardTBD 2046Elmwood Apartments TBD 2044Woodale StationTBD 2045Bridgewater BankTBD 2045Parkway ResidencesTBD 2047*  EDA has already modifed budgets to allow for the additional poolingRedevelopment 4. Return of Increment from Redevelopment TIF Districts on an Annual Basis. Wolfe Lake, Ellipse and Eliot Park have elected the additional 10% for affordable housing projects. However, the in-district obligations are over so the EDA will need to annually monitor, calculate and return any increment in excess of the 35% it is retaining for affordable housing purposes in the District (can retain up to 45% if additional 10% for admin is documented and spent on tax credit eligible projects). The City intends to utilize its proportionate share of the 65% of increment that is returned for redistribution to pay for capital replacement projects within the General Fund in accordance with its long-range financial management plan (2021 estimated to total $224,000). Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 23 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 23 5. Legislative Initiative. We recommend the City seek to obtain special legislation that would allow the City to: (i) Transfer TIF funds from its housing TIF district and redevelopment TIF districts where it has elected the additional 10% for affordable housing (total of 35%) into its Housing Fund (ii) Request that the TIF from the redevelopment districts (35%) can be used for owner-occupied housing (currently restricted to tax credit eligible rental housing); and (iii) Request to have the percent of income restrictions for rental housing be lowered to match the City’s affordable housing policy requirements to be able to integrate more affordable housing into market rate rental projects. 6. Inclusionary Housing Annual Reporting. The Shoreham, 4900 Excelsior, Elmwood Apartments, Woodale Station and Parkway Residences projects have affordable housing requirements to meet. Staff is working with the developers to ensure they are providing the EDA with the necessary compliance information. 7. Five Year Rule. MN Statute 469.1763 subdivision 3 requires that, within five years from certification date, funds must have been expended on projects within the TIF district. Wayzata Boulevard (7/1/21) and Wooddale Station District (6/30/22) have not yet reached their five-year rule deadline and should be monitored to avoid a lost opportunity for new projects within those district’s boundaries. If development does not occur or eligible costs are not incurred within the allotted time frame, the EDA/City would need to (i) decertify the District(s); or (ii) go to the Legislature and request an extension of the 5-year rule. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 24 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 24 Tax Increment Financing Districts VICTORIA PONDS Description: Victoria Ponds TIF District (County #1303) is a redevelopment district established on April 1, 1996. Originally, the district encompassed four parcels of land and was established to facilitate the construction of 74 owner occupied townhomes. 90% of increment was utilized for payment on the $760,000 PAYGO note with SVK Development. This note has been paid in full. Increment not used for this agreement was used to repay a $700,000 interfund loan for a portion of the costs associated with Hutchinson Spur Trail, which has been paid in full. Excess increment was returned to Hennepin County in 2008 in order to be able to pool future increments. The City pooled $410,715 from this District for the Erv’s Garage/Lake Street Office Building LLC and paid this amount in full in July 2008. In 2012, $525,000 was used for the CAP program ($500,000 for Hardcoat and $25,000 for CAR Properties LLC). These funds were spent under the JOBS Bill authorized by the legislature in 2009 and extended in the 2010 legislative session. Use of these dollars under the special legislative authority are exempt from the standard pooling limitations of the District. The City also created an economic development TIF district under the JOBS Bill for Hardcoat, with the increment that is generated going to repay an interfund loan to this District. In 2013 the City modified the TIF district to authorize the use of approximately $490,000 in legal pooling funds to finance public improvements which consist of the installation of a traffic signal at the intersection of 36th Street and Xenwood Avenue and reconstruction of the intersection and traffic signal at 36th Street and Wooddale Avenue. A total of $250,000 was used in 2019 for the South West Light Rail transit project. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 25 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 25 VICTORIA PONDS CONTINUED This District was decertified for pay 2014. There is approximately $70,000 cash balance, which the City can retain for legal pooling. To date a total of $1,766,247 has been returned to the County for redistribution to the City, County and School District. Adopted…………………………. 04/01/1996 Requested Date………………… 06/19/1996 Certified Date…………………… 06/28/1996 First Increment…………………… 07/1998 Decertification……...................... 11/18/2013 Modifications………………….… 04/07/2008 07/03/2013 Former and Current PID Numbers: Recommendations: 1. Use of Legal Pooling Funds. When the interfund loan due from Hardcoat is paid (anticipated in 2022), there will be a fund balance of approximately $130,175 that will be available for legal pooling. During 2019, $250,000 was used from this district to pool for the Southwest Light Rail Transit project. We recommend that the City develop a plan for use of these funds. If no pooling is completed, the balance will have to be returned to the County for redistribution. Former PID # New PID #New Use07-117-21-44-0103 07-117-21-41-0072, 07-117-21-41-0074 thru 07-117-21-41-010708-117-21-32-005007-117-21-44-010318-117-21-12-000508-117-21-32-0054 thru 08-117-21-32-0069, 08-117-21-32-0071, 08-117-21-32-0074 thru 08-117-21-32-010018-117-21-31-000118-117-21-12-0048 thru 18-117-21-12-005618-117-21-13-0088 thru 18-117-21-13-009018-117-21-31-006318-117-21-34-002118-117-21-34-0030 thru 18-117-21-34-003274 Town HomesStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 26 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 26 VICTORIA PONDS CONTINUED City of St. Louis ParkVictoria PondsORIGINALInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 4.8%At or Under LimitFiscal DisparitiesA ElectionCounty Number1303Frozen RateUTA #1 0.000%UTA #2 0.000%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal TermExpected Term Tax IncrementIFLInterest Income TOTAL REVENUESProjectJobs BillPaygoAdmin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget1998 4/1/1996 6/19/1996 6/28/1996 12/31/2023 11/18/2013‐                          ‐                          ‐                          Cumulative Modified6,100,000               200,000                 6,300,000              4,015,000               800,000                  500,000                 5,315,000               5,315,000              End of District Projected Actual Total5,739,893               143,615                 5,883,508              734,300                  525,000                  1,807,053               256,970                  3,048                       660,715                  1,766,247              5,753,333               5,753,333              Under / (Over) Budget360,107                 56,385                    416,492                 3,280,700              (525,000)                (1,007,053)             243,030                 (3,048)                     (660,715)                (1,766,247)             (438,333)                (438,333)                YearBase CurrentFiscal DisparitiesCapturedTax IncrementIFLInterest Income TOTAL REVENUESProject Jobs BillPaygoAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE19 2016‐               ‐                      ‐               ‐               128.561%‐                          8,555                      8,555                      ‐                          ‐                          25,587                    ‐                          248,100                 273,687                 361,894                 20 2017‐               ‐                      ‐               ‐               124.745%‐                          6,201                      6,201                      ‐                          ‐                          1,427                      ‐                          ‐                          1,427                      366,668                 21 2018‐               ‐                      ‐               ‐               0.000%‐                          7,903                      7,903                      ‐                          ‐                          901                         ‐                          ‐                          901                         373,670                 22 2019‐               ‐                      ‐               ‐               0.000%‐                          3,893                      3,893                      ‐                          ‐                          609                         250,000                 ‐                          250,609                 126,954                 23 2020‐               ‐                      ‐               ‐               0.000%‐                          2,913                      2,913                      ‐                          ‐                          609                         ‐                          ‐                          609                         129,258                 24 2021‐               ‐                      ‐               ‐               0.000%‐                          1,901                      1,901                      ‐                          ‐                          609                         ‐                          ‐                          609                         130,550                 25 2022‐               ‐                      ‐               ‐               0.000%‐                          843                         843                         ‐                          ‐                          609                         ‐                          ‐                          609                         130,784                 26 2023‐               ‐                      ‐               ‐               0.000%‐                          ‐                          ‐                          ‐                          609                         ‐                          ‐                          609                         130,175                  DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetIDIDStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 27 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 27 PARK CENTER HOUSING Description: Park Center TIF District (County #1304) is a housing district established on October 7, 1996. Originally, the district encompassed a portion of one parcel of land that was originally in the Excelsior Boulevard district. It was created to facilitate the development of 45 units of senior assisted living rental housing. This district was modified in 1999 to include additional parcels (which were replatted into one parcel) to allow for the construction of an additional 45 units of senior assisted living. Legislative change in 2001 eliminated the state aid penalty for this district. Increment was used to repay a $500,000 interfund loan for the Park Shores Assisted Living Project, which was paid off on September 30, 2003. In 2007, $131,000 of increment was used as part of a $400,000 deferred loan fund capital improvements for the Louisianan Court assisted living development. On February 1, 2011 $500,000 was transferred out of the District to repay the GO Louisiana Court Bonds that were refinanced. This is a deferred loan at 2% interest over a 30-year term. With the Park Shores interfund loan being repaid, there is ample increment generated on an annual basis to utilize for other affordable housing initiatives within the constraints of the TIF Act. A total of $1,309,400 has been transferred to the Housing Rehabilitation Fund to fund affordable housing initiatives through 2109. Any and all amounts transferred to the Housing Rehabilitation Fund must be used for affordable housing in the period in which it is transferred. Adopted…………………………. 10/07/1996 Certified Date…………………....05/19/1997 First Increment………………………07/1998 Anticipated Decertification…….. 12/31/2023 Modifications………………….… 09/21/1999 01/16/2007 Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 28 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 28 PARK CENTER HOUSING CONTINUED Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from outside (A election) the district. Frozen Tax Rate: 126.2470% Allowable Uses: MN Statute 469.176 subd. 4d specifies the activities on which tax increment from a housing district may be spent. In general, tax increment must be spent on housing projects meeting the income guidelines, public improvements directly related to housing projects and administrative expenses. The City has used increment from this district to support affordable housing initiatives, in compliance with TIF law. Obligations: None. Three Year Rule: The three-year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Park Center Housing District met the requirement when the City issued an interfund loan from the Development Fund for the Park Shores Assisted Living project. Former PID # New PID #New Use06-028-24-33-001706-028-24-33-002006-028-24-33-0022Park Shores Assisted LivingStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 29 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 29 PARK CENTER HOUSING CONTINUED Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The Park Center Housing four-year rule was May 2001 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 80% of tax increment revenues generated within Park Center Housing must be used to pay for qualified costs within the district. However, pursuant to MN Statute 469.1763 subd. 2 (b), activities for affordable housing projects spent in the project area is considered an activity within the district. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. This timeline has passed for Park Center which was May 2002. Compliance Requirements: Income limitations are required to be monitored on an on-going basis for a Housing District. The Authority is required to substantiate that the applicable income limitations and rent restrictions are being met on an annual basis for rental. The compliance must be completed regardless of whether the project receives tax credits or not, pursuant to 469.174 sub 11. For both facilities, they have been submitting the required documentation on an annual basis and have continued to meet the requirement that 20% of the units are affordable to persons at or below 50% of the area median income. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 30 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 30 PARK CENTER HOUSING CONTINUED Recommendations: 1. Use of Increment. As of December 31, 2019, this District had a fund balance and cash balance, respectively of approximately $880,600 and $238,600, and will generate approximately $183,000 annually. The City has determined to transfer annual TIF to its housing development account to fund income qualified housing projects. A housing project is a rental or owner-occupied housing development intended for occupancy by low- and moderate-income families. The income guidelines are defined in MN Statutes 469.1761 as follows: Rental Housing: 20% of the units occupied by families at 50% of median income (20/50) or 40% of the units occupied by families at 60% of median income (40/60). Owner Occupied: Assistance to homeowners with an income at or below 100% of the median income for a family of two or less or 115% of the median income for a family of three or more. Typically, TIF is utilized for capital expenditures, but may be used for non-capital expenditures on a limited basis. Examples of potential rental housing projects would include: 1. New affordable rental housing as part of redevelopment (20/50 or 40/60 election) 2. Renovation of an existing rental housing development (20/50 or 40/60 election) 3. Providing subsidy to an existing project that is earmarked for additional affordability (20/50 or 40/60 election) Examples of potential owner-occupied projects would include: 4. Site acquisition and demolition for infill lots that will be sold for new housing construction 5. Acquisition of foreclosed homes for resale to income qualified buyers 6. Rehabilitation loans for home improvements (including HIA owners) 7. Second mortgages to qualified home buyers Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 31 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 31 PARK CENTER HOUSING CONTINUED In order for the City to continue to utilize these funds for housing projects, the development is required to continue to meet income guidelines and report them annually to the City. There were three possible tenant income requirements for this rental housing: (i) 20% of the units affordable to persons at or below 50% of the AMI; (ii) 40% of the units affordable to persons at or below 60% of the AMI; or (iii) 50% of the units affordable to persons at or below 80% of the AMI. The Development Agreement did not specify which of these requirements must be met. This means that the Developer has some flexibility as to income requirements but must meet at least one of these income requirements on an annual basis for the duration of the TIF District. The City needs to annually monitor the income verification to assure that one of the above referenced requirements is met. If the income requirements are not met on any given year, then the City will need to return that year’s increment to the County for redistribution. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 32 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 32 PARK CENTER HOUSING CONTINUED City of St. Louis ParkPark Center HousingORIGINALInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeHousing Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 7.7%At or Under LimitFiscal DisparitiesA ElectionCounty Number1304Frozen RateUTA #1 126.247%UTA #2 0.000%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income Other Revenue TOTAL REVENUESProjectAffordable Housing Interest ExpenseInterfund LoanAdmin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget1998 10/7/1996 12/19/1996 5/19/1997 12/31/2023 12/31/2023‐                          ‐                          ‐                          Cumulative Modified5,750,000               250,000                 6,000,000              3,700,000               2,550,000               200,000                 6,450,000               6,450,000              End of District Projected Actual Total3,290,998               210,227                  450,000                  3,951,224              713,583                  2,884,400               ‐                           136,718           208,257                  8,267                       ‐                           ‐                          3,951,225               3,951,225              Under / (Over) Budget2,459,002               39,773                     (450,000)                 2,048,776              2,986,417               (2,884,400)              2,550,000               (136,718)          (8,257)                      (8,267)                      ‐                           ‐                          2,498,775               2,498,775              Year Base Currentiscal DisparitieCapturedTax Increment Interest Income Other Revenue TOTAL REVENUESProjectAffordable HousingPaygoInterfund LoanAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE20 20178,360                      142,188                 ‐                  133,828           124.745% 166,343                 1,906                      ‐                           168,249                 160,000                 3,836                      744                         ‐                          ‐                          164,580                 845,026                 21 20188,360                      147,588                 ‐                  139,228           130.191% 175,139                 3,491                      ‐                           178,630                 160,000                 4,682                      757                         ‐                          ‐                          165,439                 858,217                 22 20198,360                      152,875                 ‐                  144,515           125.012% 180,010                 7,438                      ‐                           187,448                 160,000                 4,301                      752                         ‐                          ‐                          165,053                 880,612                 23 20208,360                      159,250                 ‐                  150,890           121.682% 182,944                 4,403                      ‐                           187,347                 175,000                 5,488                      800                         ‐                          ‐                          181,288                 886,670                 24 20218,360                      159,250                 ‐                  150,890           121.682% 182,945                 4,433                      ‐                           187,378                 175,000                 7,500                      800                         ‐                          ‐                          183,300                 890,749                 25 20228,360                      159,250                 ‐                  150,890           121.682% 182,945                 4,454                      ‐                           187,399                 175,000                 7,500                      800                         ‐                          ‐                          183,300                 894,848                 26 20238,360                      159,250                 ‐                  150,890           121.682% 182,945                 4,474                      ‐                           187,419                 175,000                 7,500                      800                         ‐                          ‐                          183,300                 898,967                 27 2024‐                          ‐                          ‐                 ‐                   0.000%‐                          4,495                      ‐                           4,495                      175,000                 7,500                      ‐                          ‐                          182,500                 720,962                 28 2025‐                          ‐                          ‐                 ‐                   0.000%‐                          3,605                      ‐                           3,605                      175,000                 7,500                      ‐                          ‐                          182,500                 542,066                 29 2026‐                          ‐                          ‐                 ‐                   0.000%‐                          2,710                      ‐                           2,710                      175,000                 7,500                      ‐                          ‐                          182,500                 362,277                 30 2027‐                          ‐                          ‐                 ‐                   0.000%‐                          1,811                      ‐                           1,811                      175,000                 7,500                      ‐                          ‐                          182,500                 181,588                 31 2028‐                          ‐                          ‐                 ‐                   0.000%‐                          908                         ‐                           908                         175,000                 7,497                      ‐                          ‐                          182,497                 (1)                            32 2029‐                          ‐                          ‐                 ‐                   0.000%‐                          (0)                            ‐                           (0)                            ‐                          ‐                          ‐                          ‐                          (1)                            33 2030‐                          ‐                          ‐                 ‐                   0.000%‐                          (0)                            ‐                           (0)                            ‐                          ‐                          ‐                          ‐                          (1)                            34 2031‐                          ‐                          ‐                 ‐                   0.000%‐                          ‐                           ‐                          ‐                          ‐                          ‐                          ‐                          ‐                          (1)                            35 2032 ‐                           ‐                           ‐                 ‐                   0.000%‐                          ‐                           ‐                          ‐                          ‐                          ‐                          ‐                          ‐                          (1)                            36 2033‐                          ‐                          ‐                 ‐                   0.000%‐                          ‐                           ‐                          ‐                          ‐                          ‐                          ‐                          ‐                          (1)                             DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetIDStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 33 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 33 ZARTHAN AVENUE/16TH STREET Description: Zarthan Avenue/16th Street TIF District (County #1305 and #1306) is a redevelopment district established on December 20, 1999. Originally, the district encompassed twelve parcels of land and was created to facilitate the development of two hotels and 86 townhome units just south of I-394. The EDA pledged tax increment revenues from this district to three PAYGO notes, which are all held by CSM. The property tax reform of 2001 hit this development particularly hard. Currently, tax increment income is less than the annual interest payments on the notes. The notes contain pledges from three properties. The Rottlund note covers 86 owner-occupied townhomes. These tax capacities dropped by 25% in 2001. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped. The remaining two notes are supported by increments from two hotels. The tax-capacities on these properties dropped by 40% in 2001, but the actual tax savings was significantly less than that amount. Assuming no change in the local tax rate, the larger of the two hotels would have seen a property tax savings of $115,000 per year but the new statewide property tax substituted a new tax for $75,000 of the savings. The state property tax is not captured by TIF and is therefore a net loss to the note holder. CSM had approached the City after the 2001 legislative changes asking for future consideration through several potential actions such as a change in the interest rate on the notes, the extension of the term of the district, pooling among the notes, a change in the fiscal disparities election in the district, lifting of the frozen tax rate, and/or pooling from other districts. No action was taken on that request. In 2014, the two (2) hotels were sold to Garrison Investment Group of New York and the TIF notes were transferred to the new owners. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 34 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 34 ZARTHAN AVENUE/16TH STREET CONTINUED Adopted………………………. 12/20/1999 Requested Date……………… 01/28/2000 Certified Date………………… 05/09/2000 First Increment………………… 07/2001 Anticipated Decertification…...12/31/2026 Former and Current PID Numbers: Former PID # New PID #New Use130504-117-21-32-000804-117-21-32-0094Rottlund Master Parcel04-117-21-32-006604-117-21-32-0088Spring Hill Suites04-117-21-32-0102 thru 013304-117-21-32-0168 thru 018304-117-21-32-0102 thru 013304-117-21-32-0168 thru 018304-117-21-32-0088Spring Hill Suites04-117-21-32-0089Town Place Suites130604-117-21-32-000904-117-21-32-001004-117-21-32-001104-117-21-32-001204-117-21-32-001304-117-21-32-001404-117-21-32-001504-117-21-32-001604-117-21-32-0150 thru 167 and 04-117-21-32-0185 thru 20438 Rottlund Town Homes48 Rottlund Town Homes04-117-21-32-007904-117-21-32-0078 Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 35 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 35 ZARTHAN AVENUE/16TH STREET CONTINUED Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: The parcels in this district cross over two watershed districts. The county has assigned two numbers to correspond with the different watershed rates.  1305 - 143.7690%  1306 - 144.2940% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There are three (3) PAYGO TIF Note obligations for this district as follows:  Note #1: CSM Hospitality (Town Place Suites) in the amount of $1,101,362 at 8.0% and is payable from 8/1/2002 to 2/1/2022. This note was reassigned in February of 2016 and is currently owned by MMP OpCo LLC (Minneapolis West PT)  Note #2: CSM Hospitality (Spring Hill Suites) in the amount of $1,448,088 at 8.0% and is payable from 8/1/2002 to 2/1/2022. This note was reassigned in February of 2016 and is currently owned by MMP OpCo LLC (Minneapolis West HS)  Note #3: The Rottlund Company in the amount of $1,395,547 at 8.0% and is payable from 8/1/2003 to 2/1/2023. This note was reassigned in February of 2016 and is currently owned by MMP OpCo LLC (Minneapolis West HS) Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 36 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 36 ZARTHAN AVENUE/16TH STREET CONTINUED Due to legislative changes to tax rates in 2001 and reallocation of the market value homestead credit to a market value homestead exclusion in 2011, it is anticipated that payments will be made on these notes through the duration stated above and that there will not be adequate TIF to pay off Notes 1 and 2. Three Year Rule: The three-year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Zarthan district met the requirement when the City authorized the issuance of the notes in 2000. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. The four-year deadline was May 2004 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues must be used to pay for qualified costs within the district. Statute further specifies that within five years, tax increment must be paid for activities, bonds issued, contracts entered into in order for revenues to be considered to have been spent. The five-year deadline was May 2005. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 37 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 37 ZARTHAN AVENUE/16TH STREET CONTINUED Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. This district may not be enlarged after May 2005. Recommendations: 1. Pooling Analysis and Use of Funds. During 2019, $450,000 was used for the Southwest Light Rail Transit project and another $34,234 was to install fiberoptic cable. In 2020, an additional $29,903 was used for fiber optic. It is estimated that there will be approximately $607,600 available for pooling for qualified redevelopment costs when the obligations are paid in August 2022. We recommend that the City/EDA modify the budget of the District to allow for an additional 10% pooling for housing. This would allow approximately $779,800 to be used for affordable housing. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 38 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 38 ZARTHAN AVENUE/16TH STREET CONTINUED City of St. Louis ParkZarthan Ave ‐ 16th StORIGINALInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 1.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently:for year 20192.9%At or Under LimitFiscal DisparitiesB ElectionCounty Number1305, 1306Frozen RateUTA #1 143.769%UTA #2 144.294%UTA #3 0.000%Current Year 2019First Receipt City Approved Cert Request Certified Legal Term Expected TermTax Increment Interest Income TOTAL REVENUESProjectAdmin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget2001 12/20/1999 1/28/2000 5/9/2000 12/31/2026 12/31/2026‐                          ‐                          ‐                          Cumulative Modified13,500,000             110,000                 13,610,000            5,910,000               6,785,000               1,000,000              13,695,000             13,695,000            End of District Projected Actual Total10,724,520             65,495                    10,790,015            34,070                     1,521,462               1,907,514               3,690,035               207,014                  20,680                     553,826                  1,467,962              9,402,564               9,402,564              Under / (Over) Budget2,775,480               44,505                    2,819,985              5,875,930               5,263,538               (1,907,514)              (3,690,035)              792,986                  (20,680)                   (553,826)                 (1,467,962)             4,292,436               4,292,436              Year Base Currentiscal DisparitieCapturedTax Increment Interest Income TOTAL REVENUESProject CSM‐Town Place CSM‐Spring Hill CSM‐RottlundAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE17 201772,212              520,609             70,992         377,405            124.745% 467,997                 3,592                      471,589                 ‐                          89,501                    108,658                 216,547                 7,143                      1,410                      39,689                    ‐                          462,949                 646,153                 18 201872,212              562,169             81,794         408,163            130.191% 524,194                 6,978                      531,172                 ‐                          94,025                    113,680                 238,273                 15,184                    1,500                      ‐                          ‐                          462,663                 714,662                 19 201972,212              569,253             77,059         419,982            125.012% 520,654                 1,319                      521,973                 ‐                          91,930                    118,621                 252,421                 6,091                      1,467                      484,234                 ‐                          954,764                 281,871                 20 202072,212              625,626             85,933         467,481            121.036% 560,238                 1,409                      561,647                 ‐                          91,184                    116,882                 276,250                 5,602                      1,500                      29,903                    ‐                          521,322                 322,197                 21 202172,212              625,626             85,933         467,481            121.036% 564,601                 1,611                      566,212                 ‐                          96,495                    115,241                 300,371                 5,646                      1,500                      ‐                          519,253                 369,156                 22 202272,212              625,626             85,933         467,481            121.036% 564,601                 1,846                      566,447                 ‐                          48,247                    57,620                    214,972                 5,646                      1,500                      ‐                          ‐                          327,986                 607,617                 23 202372,212              625,626             85,933         467,481            121.036% 564,601                 3,038                      567,639                 ‐                          ‐                          ‐                          5,646                      1,500                      ‐                          366,991                 374,137                 801,119                 24 202472,212              625,626             85,933         467,481            121.036% 564,601                 4,006                      568,606                 ‐                          5,646                      1,500                      ‐                          366,991                 374,137                 995,589                 25 202572,212              625,626             85,933         467,481            121.036% 564,601                 4,978                      569,579                 ‐                          5,646                      1,500                      ‐                          366,991                 374,137                 1,191,031              26 202672,212              625,626             85,933         467,481            121.036% 564,601                 5,955                      570,556                 ‐                          5,646                      1,500                      ‐                          366,991                 374,137                 1,387,451               DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local   Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetPaygoID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 39 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 39 MILL CITY Description: Mill City TIF District (County #1307) is a redevelopment district established on March 20, 2000. Originally, the district was established with two (2) parcels to facilitate the redevelopment of a polluted site and construction of a multi-family rental housing development. Rental housing class rates were reduced dramatically by the 2001 legislature from 2.4% to 1.25%. Projected increment when the note was sized was expected to be $394,188 per year beginning in 2003, which is substantially less than the current annual tax increment. However, the reduction of increment also meant a decrease in taxes paid by the owner. Therefore, the effect upon the rental housing development should be neutral for the owner because rental housing pays no state property tax (tax obligated for the State’s education system). In 2011, The City utilized $70,000 from this district to pay for project costs for the Bikemasters project through the City’s CAP program. These funds were spent under the JOBS Bill authorized by the legislature in 2009 and extended in the 2010 legislative session. Use of these dollars under the special legislative authority are exempt from the standard pooling limitations of the District. In 2015 the property was sold. At that time, the TIF Note was reviewed to determine if the following conditions existed: (1) the property was assigned an assessor's market value as of January 2, 2001, that exceeds the market value as of January 2, 2000; and (2) there is any unpaid principal or accrued interest on this Note after the payment of available Tax Increment on February 1, 2022. Based upon the analysis that was completed, it was determined that the final TIF Note payment would be February 1, 2023. Even with the extension of payments, it is anticipated that the TIF Note will not be paid in full. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 40 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 40 MILL CITY CONTINUED Adopted…………………..….…. 03/20/2000 Requested Date…………….…..06/08/2000 Certified Date……………………06/19/2000 First Increment……..……….…… 07/2001 Anticipated Decertification...… 12/31/2026 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 144.2940% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Former PID # Former UseNew PID #New Use17-117-21-31-0012 Vacant Land17-117-21-42-0094City Vacant Land17-117-21-34-0082 Mill City Plywood17-117-21-34-0087Mill City ApartmentsStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 41 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 41 MILL CITY CONTINUED Obligations: There is currently one PAYGO Note in this district as follows:  $3,431,137 at 8.75% interest. The Note was issued on November 20, 2000 to MSP SLP Apartments, LLC. The note is payable from 94.75% of the increment received on the project. After the 8/1/2020 payment, the current balance is $3,034,559 and the projected final payment is on February 1, 2023. It is expected the Note will not be paid in full due to tax rate compression. Other Development Agreement Compliance: 1. Minimum Assessment Agreement. The minimum market value as of January 2, 2002 shall be $13,400,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Three Year Rule: The three-year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. Mill City met the requirement when the City approved the Development Agreement with MSP SLP Apartments LLC on April 3, 2000. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four-year deadline was June 2004 and was met because qualifying activities happened prior to this date. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 42 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 42 MILL CITY CONTINUED Five Year Rule: At least 75% of tax increment revenues generated within the Mill City district must be used to pay for qualified costs within the district. The five-year deadline was June 2005. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 2005. Recommendations: 1. Pooling Analysis and Use of Funds. During 2019, $125,000 was used for the Southwest Light Rail Transit project and another $6,739 was used for fiberoptic cable. There would be approximately $127,700 for pooling available If the district were to decertify in 2022 after the obligations are paid in February 2023. We recommend that the City/EDA modify the budget of the District to allow for an additional 10% pooling for housing. This would allow approximately $737,400 to be used for affordable housing. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 43 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 43 MILL CITY CONTINUED City of St. Louis ParkMill City ORIGINALInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopmentAdmin Expense4.25%2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 20192.2%At or Under LimitFiscal DisparitiesB ElectionCounty Number1307Frozen RateUTA #1 144.294%UTA #20.000%UTA #30.000%Current Year 2019First Receipt City Approved Cert RequestCertified Legal Term Expected TermTax IncrementInterest Income TOTAL REVENUESProject Interest Expense BondsAdmin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget2001 3/20/2000 6/8/2000 6/19/2000 12/31/2026 12/31/2026‐                          ‐                          ‐                          Cumulative Modified11,500,000             100,000                 11,600,000            8,000,000               4,300,000               1,000,000              13,300,000             13,300,000            End of District Projected Actual Total9,832,196              69,680                    9,901,877              8,981                      6,955,368              70,000                 282,315                 15,658                    131,739                 1,548,245              9,012,305              9,012,305              Under / (Over) Budget1,667,804              30,320                    1,698,123              7,991,019              (2,655,368)             (70,000)                717,685                 (15,658)                  (131,739)                (1,548,245)             4,287,695              4,287,695              YearBaseCurrentFiscal DisparitieCapturedTax IncrementInterest Income TOTAL REVENUESProjectPaygo Jobs BillAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE17 201712,674                    437,075                 ‐                  424,401               124.745% 527,513                 914                         528,427                 ‐                          469,792                 ‐                        5,026                      1,218                      ‐                          ‐                          476,036                 385,961                 18 20188,859                      462,500                 ‐                  453,641               130.191% 588,476                 2,456                      590,932                 ‐                          528,699                 ‐                        11,235                    1,275                      ‐                          ‐                          541,209                 435,685                 19 20198,859                      475,000                 ‐                  466,141               125.012% 580,635                 1,935                      582,570                 ‐                          553,865                 ‐                        6,078                      1,231                      131,739                 ‐                          692,913                 325,341                 20 20208,859                      500,000                 ‐                  491,141               121.682% 595,478                 1,627                      597,105                 ‐                          542,824                 ‐                        25,308                    1,231                      ‐                          ‐                          569,363                 353,083                 21 20218,859                      500,000                 ‐                  491,141               121.682% 595,479                 1,765                      597,244                 ‐                          537,004                 ‐                        25,308                    1,231                      ‐                          ‐                          563,542                 386,785                 22 20228,859                      500,000                 ‐                  491,141               121.682% 595,479                 1,934                      597,413                 ‐                          537,004                 ‐                        25,308                    1,231                      ‐                          ‐                          563,542                 420,655                 23 20238,859                      500,000                 ‐                  491,141               121.682% 595,479                 2,103                      597,582                 ‐                          268,502                 ‐                        25,308                    1,231                      ‐                          387,061                 682,102                 336,135                 24 20248,859                      500,000                 ‐                  491,141               121.682% 595,479                 1,681                      597,159                 ‐                          ‐                        25,308                    1,231                      ‐                          387,061                 413,600                 519,695                 25 20258,859                      500,000                 ‐                  491,141               121.682% 595,479                 2,598                      598,077                 ‐                          ‐                        25,308                    1,231                      ‐                          387,061                 413,600                 704,172                 26 20268,859                      500,000                 ‐                  491,141               121.682% 595,479                 3,521                      599,000                 ‐                          ‐                        25,308                    1,231                      ‐                          387,061                 413,600                 889,572                  DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local     Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 44 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 44 PARK COMMONS Description: Park Commons TIF District (County #1308) is a redevelopment district established on January 16, 2001. Originally, the district encompassed 38 parcels of land, most of which were in the Excelsior Boulevard District and was established to facilitate the construction of mixed-use housing and retail facilities. Construction has been completed on all phases and consists of 338 market rate apartments, 306 condominiums and approximately 86,500 sq/ft of commercial space. The EDA entered into a contract with Meridian Properties (TOLD Development) on January 16, 2001 and executed five amendments to it for various items including end uses, timing of construction, transfer of property and remediation issues. Overall, the contract delineates PAYGO obligation for the development in an amount not to exceed $18 million at 8.5% interest, over a 22-year period. On July 1, 2003, the EDA issued a PAYGO note in the principal amount of $3.5 Million at 8.5% for the Phase I public improvements in Park Commons East. In addition, three (3) Phase Notes were issued on June 5, 2006 at 8.5% as follows: Phase NE Note for $4,668,633, Phase NW Note for $4,079,105 and Phase E Note for $3,300,715. Each Note is payable with 97% of the TIF generated from the parcels within each phase. In addition, the EDA issued an interfund loan of $3,145,046 for other public improvements. The loan is payable from the Park Commons TIF District to the Excelsior Boulevard TIF District, with interest at the rate of 4.53% (determined by the City’s financial advisor in accordance with the Contract). The improvements were financed from proceeds of the Series 1997A Bonds, and in accordance with Section on 7.3(c)(7) of the Contract, retained Available Tax Increment (as defined in the Contract) from the Park Commons TIF District is used to repay the EDA based on a payment schedule determined as if the City had issued new tax increment bonds (the effect of this provision was to create the interfund loan). Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 45 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 45 PARK COMMONS CONTINUED Expenditure of the Series 1997A Bond proceeds diverted funds that were available for ongoing redevelopment activities in the Project Area. Accordingly, the Authority determined to replenish the funds in the Excelsior Boulevard TIF District by making a loan from the Authority’s Development Fund to the account for the Excelsior Boulevard TIF District. By Resolution No. 07-02 approved January 16, 2007 (the 2007 Interfund Loan Resolution) the Authority approved a transfer of funds in the amount of $2,945,497.40 (representing the unpaid balance of the original interfund loan described in the Contract) from the Development Fund to the Excelsior Boulevard TIF District fund, thereby making those funds immediately available for redevelopment activities until termination of the Excelsior Boulevard TIF District on August 1, 2009. Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes, thus impacting several of the Notes. Adopted……………………… 01/16/2001 Requested Date……………… 03/08/2001 Certified Date………………… 06/07/2001 First Increment………………… 07/2002 Decertifies…………………… 12/31/2027 REMAINDER OF PAGE LEFT INTENTIONALLY BLANK Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 46 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 46 PARK COMMONS CONTINUED Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from outside (A election) the district. Frozen Tax Rate: 119.0650% PhaseFormer PID # New PID #New Use07-028-24-21-010707-028-24-21-010807-028-24-21-025007-028-24-21-025107-028-24-21-025506-028-24-43-007907-028-24-12-017007-028-24-12-017407-028-24-2-1011606-028-24-34-000806-028-24-34-001806-028-24-34-000906-028-24-34-001906-028-24-34-001006-028-24-34-0022 Wolfe Park07-028-24-21-009807-028-24-21-0257 Center Green Space/Median - City Owned07-028-24-21-010907-028-24-21-011207-028-24-21-011706-028-24-34-000106-028-24-34-001106-028-24-34-001206-028-24-34-001307-028-24-21-050407-028-24-21-0099 07-028-24-21-0510 (formerly part of 7-028-24-21-0503)07-028-24-21-0254 07-028-24-21-0511 (formerly part of 7-028-24-21-0503)06-028-24-34-000206-028-24-34-0024 Outlot - Parking06-028-24-34-000306-028-24-34-000406-028-24-34-000506-028-24-34-000606-028-24-34-000706-028-24-34-0016NE06-028-24-34-0025 thru 06-028-24-34-0265Grand Condominiums at Excelsior06-028-24-34-0267 thru 06-028-24-34-0330Grand Condominiums at Excelsior1A07-028-24-21-0256 Excelsior and Grand Apartment Over Retail1B07-028-24-12-0175Excelsior and Grand Apartment Over RetailCityNWCentral Green SpaceMedian - City Owned 07-028-24-21-0258EDA Vacant Land (next to Bally's) & Part of Princeton Ln07-028-24-21-0261 thru 07-028-24-21-0502Grand Condominiums at ExcelsiorStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 47 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 47 PARK COMMONS CONTINUED Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There are currently five obligations in this district as follows:  $3,145,046 Interfund loan at 4.53%. This Loan was used to finance the initial public improvements and has a priority on TIF generated from the District.  $3,500,000 PAYGO Note at 8.5% interest for Phase I. This Note was issued on July 1, 2003 and is payable from 97% of the increment generated from the parcels making up the development after a deduction is made for payment of the Interfund Loan above.  $3,300,715 PAYGO Note at 8.5% for Excelsior and Grand Phase E. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development.  $4,668,633 PAYGO Note at 8.5% for Excelsior and Grand Phase NE. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development.  $4,079,105 PAYGO Note at 8.5% for Excelsior and Grand Phase NW. This Note was issued on June 5, 2006 and is payable from 97% of the increment generated from the parcels making up the development. Three Year Rule: The three-year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. Park Commons met the requirement when the City approved the Development Agreement with Meridian Properties on January 16, 2001. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 48 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 48 PARK COMMONS CONTINUED Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four-year deadline was June 2005 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues generated within Park Commons must be used to pay for qualified costs within the district. The five-year deadline was June 2006. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 2006. Recommendations: 1. Use of TIF after Interfund Loan (IFL) and Excelsior and Grand Notes are repaid. It is anticipated that the IFL will be repaid on February 1, 2021. Approximately $279,000/year is being applied to repayment on this obligation. Starting with the August 1, 2021 payment, this amount will be utilized on a prorated basis to repay the Phase Notes. It is anticipated that the Excelsior and Grand Note Phase I will be repaid on August 1, 2022. Approximately $1.1 million/year was being applied to repayment on this obligation. Starting after the August 1, 2022 payment, this amount will be utilized on a prorated basis to repay the Phase Notes. 2. Pooling Analysis and Use of Funds It is estimated that there will be approximately $4M available for pooling for qualified redevelopment costs when the obligations are paid in 2028. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 49 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 49 PARK COMMONS CONTINUED City of St. Louis ParkPark CommonsORIGINALInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently:0.7%At or Under LimitFiscal DisparitiesA ElectionCounty Number1308Frozen RateUTA #1 119.065%UTA #2 0.000%UTA #3 0.000%Current Year 2019First Receipt City Approved Cert Request Certified Legal Term Expected TermTax IncrementOther RevenuesInterest Income TOTAL REVENUESProject Interest ExpenseAdmin Expense County Admin Outside District TOTAL EXPENSEOriginal Budget2002 1/16/2001 3/8/2001 6/7/2001 12/31/2027 12/31/2027‐                          ‐                          ‐                          Cumulative Modified75,000,000             3,250,000       250,000                 78,500,000            49,750,000             45,000,000            7,500,000              102,250,000          102,250,000         End of District Projected Actual Total49,826,611             111,821                 49,938,433            7,396                       4,733,317               9,605,255               7,966,097             11,534,482        10,485,994           914,389                  91,767                     511,327                  ‐              45,850,024             45,850,024            Under / (Over) Budget25,173,389            138,179                 28,561,567            49,742,604            40,266,683            (9,605,255)             (7,966,097)          (11,534,482)      (10,485,994)        6,585,611              (91,767)                  (511,327)                ‐              56,399,976            56,399,976            YearBase Currentiscal DisparitieCapturedTax IncrementInterest Income TOTAL REVENUESProjectTOLD Excel and Grand Phase E Phase NE Phase NW Admin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE15 2016112,685         1,995,905          ‐                 1,883,220      128.561% 2,226,110              2,226,110              ‐                          279,317                 737,328                 270,127               442,759             427,443               10,440                    6,066                      ‐                          ‐              2,173,480              926,567                 16 201772,035            2,349,411          ‐                 2,277,376      124.745% 2,652,452              114                         2,652,566              ‐                          279,317                 881,761                 278,355               442,129             475,217               10,985                    6,517                      ‐                          ‐              2,374,281              1,204,852              17 201872,035            2,302,146          ‐                 2,230,111      130.191% 2,633,103              2,626                      2,635,729              ‐                          279,317                 976,442                 303,186               496,951             512,157               6,133                      6,387                      ‐                          ‐              2,580,573              1,260,008              18 201972,035            2,399,370          ‐                 2,327,335      125.012% 2,757,776              10,137                    2,767,913              ‐                          279,317                 1,035,706              299,242               480,190             465,105               5,811                      6,406                      ‐                          ‐              2,571,776              1,456,145              19 202072,035            2,478,053          ‐                 2,406,018      121.682% 2,784,729              7,281                      2,792,010              ‐                          279,317                 1,074,568              319,494               488,543             528,545               83,542                    6,066                      ‐                          ‐              2,780,074              1,468,081              20 202172,035            2,478,053          ‐                 2,406,018      121.682% 2,854,412              7,340                      2,861,753              ‐                          161,073                 1,117,969              340,925               535,942             560,517               85,632                    6,066                      ‐                          ‐              2,808,124              1,521,710              21 202272,035            2,478,053          ‐                 2,406,018      121.682% 2,854,412              7,609                      2,862,021              ‐                          448,721                 482,782               769,544             781,468               85,632                    6,066                      ‐                          ‐              2,574,214              1,809,516              22 202372,035            2,478,053          ‐                 2,406,018      121.682% 2,854,412              9,048                      2,863,460              ‐                          624,639               1,003,147          1,002,419            85,632                    6,066                      ‐                          ‐              2,721,904              1,951,072              23 202472,035            2,478,053          ‐                 2,406,018      121.682% 2,854,412              9,755                      2,864,168              ‐                          624,639               1,003,147          1,002,419            85,632                    6,066                      ‐                          ‐              2,721,904              2,093,336              24 202572,035            2,478,053          ‐                 2,406,018      121.682% 2,854,412              10,467                    2,864,879              ‐                          624,639               1,003,147          1,002,419            85,632                    6,066                      ‐                          ‐              2,721,904              2,236,311              25 202672,035            2,478,053          ‐                 2,406,018      121.682% 2,854,412              11,182                    2,865,594              ‐                          624,639               1,003,147          737,967               85,632                    6,066                      ‐                          ‐              2,457,451              2,644,454              26 202772,035            2,478,053          ‐                 2,406,018      121.682% 2,854,412              13,222                    2,867,635              ‐                          624,639               331,711             ‐                        85,632                    6,066                      ‐                          ‐              1,048,048              4,464,040              27 2028‐                  ‐                      ‐                ‐                  0.000%‐                          22,320                    22,320                   ‐                          312,320               ‐                      ‐                        85,632                    ‐                          ‐              397,952                 4,088,408              Paygo Notes DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetCASH FLOW PROJECTIONS ROLL UPTIF YearTAX CAPACITYCurrent Local     Tax RateRevenuesExpendituresEnding BalanceID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 50 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 50 WOLFE LAKE Description: Wolfe Lake TIF District (County #1310) is a redevelopment district established on July 7, 2003. Originally the district encompassed four (4) parcels of land and was established to facilitate the rehabilitation of an area adjacent to West 36th Street and Belt Line Boulevard into office and other commercial uses. These parcels were eventually replatted into two (2) parcels when development was commenced. This district was certified by the County on April 26, 2004 and first increment was received in 2006. Adopted……………………..….…07/07/2003 Requested Date………………… 12/15/2003 Certified Date……………….…….04/26/2004 First Increment………………..…......07/2006 Modification…………………….…..12/2/2019 Anticipated Decertification……....12/31/2031 Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 120.9240% Former PID # Former UseNew PID #New Use06-028-24-31-0020 Vacant Land06-028-24-31-0022Wolfe Lake West Multi-Tenant Commercial06-028-24-31-0020 Multi-Tenant Building06-028-24-31-0023Wolfe Lake East - OfficeStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 51 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 51 WOLFE LAKE CONTINUED Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows:  $996,000 at 7.5% interest. This Note was issued on January 20, 2006 to Wolf Lake/Belt Line Industrial Park. The EDA has pledged 95% of tax increment revenues from this District. This note was fully repaid as of February 1, 2020. Other Development Agreement Compliance: 1. Minimum Assessment Agreement. The minimum market value as of January 2, 2005 shall be $9,500,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 2. Repayment of Assistance. If the property is transferred within 5 years of issuance of the Certificate of Occupancy, an analysis of repayment of a portion of the assistance is to be completed. If the property does not transfer ownership in this timeframe, then no look back is required. The property ownership was never transferred in the 5-year period. 3. Authority’s Option to Cure Default on Mortgage. Developer must provide City with any notice of default it receives from its mortgage holder and the City has the right, but not the obligation to cure any default on behalf of the developer. Three Year Rule: The three-year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Wolfe Lake district met the requirement when the City approved the Development Agreement with Belt Line Industrial Park, Inc. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 52 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 52 WOLFE LAKE CONTINUED Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The Wolfe Lake four-year deadline was April 2008 and was met because qualifying activities happened prior to this date. This district did not fall within the certification dates for extension of the four-year rule. Five Year Rule: At least 75% of tax increment revenues generated within the Wolfe Lake district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Wolfe Lake Redevelopment district fits this timeline and its five-year rule was April 26, 2014. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Recommendations: 1. Use of TIF For Redevelopment. The TIF Note for this District was paid off on February 1, 2020. Currently there is approximately cash balance $120,500 in the District for use on redevelopment projects, which represents the actual cash balance at December 21, 2020 after increment is returned as of year-end 2020. Of this, it is estimated that $50,000 is available for pooling for qualified redevelopment costs (remaining is available for affordable housing). Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 53 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 53 WOLFE LAKE CONTINUED 2. Return of Increment For Redistribution on an Annual Basis. The EDA modified the budget in 2019 to allow for an additional 10% pooling for affordable housing. Since the in-district obligations are paid in full the EDA will need to annually monitor, calculate and return any increment in excess of the 35% (approximately $49,683) it is retaining for affordable housing purposes in the District (can retain up to 45% if additional 10% for admin is documented and spent on tax credit eligible projects). The City intends to utilize its proportionate share of the 65% of increment that is returned for redistribution to pay for capital replacement projects within the General Fund in accordance with its long-range financial management plan (2021 estimated to total $40,714). Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 54 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 54 WOLFE LAKE CONTINUED City of St. Louis ParkWolfe lakeORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 3.2%At or Under LimitFiscal DisparitiesB ElectionCounty Number1310Frozen RateUTA #1 120.942% 0.000% 0.000%UTA #2 0.000%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income TOTAL REVENUESProject Intersest ExpenseAffordable HousingAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSEOriginal Budget2006 7/7/2003 12/15/2003 4/26/2004 12/31/2031 12/31/2031‐                          ‐                          ‐                          Cumulative Modified12/2/20192,594,000               50,000                    2,644,000              593,000                  1,350,000               572,000                129,000                 2,644,000               2,644,000              End of District Projected Actual Total3,630,825               26,321                    3,181,663              ‐                           1,630,947               ‐                         121,297                  13,401                     ‐                           1,213,892              2,659,946               2,979,537              Under / (Over) Budget(1,036,825)              23,679                    (537,663)                593,000                  (280,947)                 572,000                7,703                       (13,401)                   ‐                           (1,213,892)             (15,946)                   (335,537)                Year Base Current Fiscal Disparities Captured Tax Increment Interest Income TOTAL REVENUESProject PaygoAffordable HousingAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE11 2016 34,346                     191,770                  46,716                     110,708                  128.561% 133,411                  181                         133,592                 ‐                           120,721                  ‐                         6,099                       704                          ‐                           ‐                          127,524                  89,839                   12 2017 34,346                     192,520                  51,569                     106,605                  124.745% 128,466                  186                         128,652                 ‐                           124,392                  ‐                         7,121                       697                          ‐                           ‐                          132,210                  86,281                   13 2018 34,346                     202,420                  57,547                     110,527                 130.191% 133,191                 510                         133,701                 ‐                          117,352                 ‐                        5,307                      708                         ‐                          ‐                          123,367                 96,615                   14 201934,346                    215,680                 60,161                    121,173                 125.012% 146,024                 1,634                      147,658                 ‐                          118,185                 ‐                        9,372                      716                         ‐                          ‐                          128,273                 116,000                 15 202034,346                    227,700                 64,210                    129,144                 121.682% 155,628                 580                         156,208                 ‐                          48,449                    ‐                        4,669                      704                         ‐                          101,158                 154,980                 117,229                 16 202134,346                    227,700                 64,210                    129,144                 121.682% 155,627                 586                         156,213                 ‐                          ‐                        4,669                      704                         ‐                          101,158                 106,530                 166,912                 17 202234,346                    227,700                 64,210                    129,144                 121.682% 155,627                 835                         156,462                 ‐                          ‐                        4,669                      704                         ‐                          101,158                 106,530                 216,843                 18 202334,346                    227,700                 64,210                    129,144                 121.682% 155,627                 1,084                      156,711                 ‐                           ‐                         4,669                       704                          ‐                           101,158                 106,530                  267,024                 19 2024 34,346                     227,700                  64,210                     129,144                  121.682% 155,627                  1,335                      156,962                 ‐                           ‐                         4,669                       704                          ‐                           101,158                 106,530                  317,455                 20 2025 34,346                     227,700                  64,210                     129,144                  121.682% 155,627                  1,587                      157,214                 ‐                           ‐                         4,669                       704                          ‐                           101,158                 106,530                  368,139                 21 2026 34,346                     227,700                  64,210                     129,144                  121.682% 155,627                  1,841                      157,468                 ‐                           ‐                         4,669                       704                          ‐                           101,158                 106,530                  419,077                 22 2027 34,346                     227,700                  64,210                     129,144                  121.682% 155,627                  2,095                      157,722                 ‐                           ‐                         4,669                       704                          ‐                           101,158                 106,530                  470,269                 23 2028 34,346                     227,700                  64,210                     129,144                  121.682% 155,627                  2,351                      157,978                 ‐                           ‐                         4,669                       704                         ‐                          101,158                 106,530                 521,717                 24 202934,346                    227,700                 64,210                    129,144                 121.682% 155,627                 2,609                      158,236                 ‐                          ‐                        4,669                      704                         ‐                          101,158                 106,530                 573,422                 25 203034,346                    227,700                 64,210                    129,144                 121.682% 155,627                 2,867                      158,494                 ‐                          ‐                        4,669                      704                         ‐                          101,158                 106,530                 625,386                 26 203134,346                    227,700                 64,210                    129,144                 121.682% 155,627                 3,127                      158,754                 ‐                          ‐                        4,669                      704                         ‐                          101,158                 106,530                 677,609                 27 2032‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                          ‐                          ‐                          ‐                        ‐                          ‐                          ‐                          ‐                          677,609                 28 2033‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                          ‐                          ‐                          ‐                        ‐                          ‐                          ‐                          ‐                          677,609                  DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 55 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 55 AQUILA COMMONS Description: Aquila Commons (County #1311) is a housing district established on September 7, 2004. Originally the district encompassed one (1) parcel of land and was established to facilitate the construction of a limited equity senior housing co-operative on the former Talmud Torah School. The district currently contains 106 owner-occupied units in the form of a limited equity cooperative, under which 95% of the initial buyers will need to meet TIF income restrictions Adopted………………………..09/07/2004 Requested Date………………12/20/2004 Certified Date………….....… 04/04/2005 First Increment………………… 07/2007 Anticipated Decertification… 12/31/2032 Former and Current PID Numbers: This TIF district originally had one (1) parcel and was replatted into 107 parcels. Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 114.27100% Former PID # Former UseNew PID #New Use18-117-21-14-0008Aquila Commons Senior Cooperative - Master Parcel18-117-21-14-0167 through 0272Aquila Commons Senior Cooperative18-117-21-14-0008SchoolStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 56 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 56 AQUILA COMMONS CONTINUED Allowable Uses: MN Statute 469.176 subd. 4d specifies the activities on which tax increment from a housing district may be spent. In general, tax increment must be spent on housing projects meeting the income guidelines, public improvements directly related to housing projects and administrative expenses. Obligations: There is one PAYGO Note that was issued for this project as follows:  $1,050,000 at 5.75% interest. This Note was issued on May 25, 2006 to Aquila Senior LLC. The EDA has pledged 95% of tax increment revenues from this District and the Note was paid in full on August 1, 2018 Other Development Agreement Compliance: 1. Income restrictions. 95% of the units sold are income restricted pursuant to TIF law. Based upon this, at least 40% of the unit interests (42 units) need to be sold to persons with a household income not exceeding 80% of the median income and adjusted for family size. At least 55% of the unit interests (58 units) need to be sold to persons at or below 100% of the area median income for households of two or less and to persons at or below 115% of the area median income for households of three or more. 2. Assignment of Note. Except for a collateral assignment to a Holder the developer may not transfer or assign its interest in the TIF Note to another party without the written consent of the Authority. 3. Look Back. Within 60 days after closing on initial sale of all units, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 8.00% rate of return, then 50 percent of the profit in excess of 8.00% will be applied as prepayment of the outstanding principal amount of the TIF Note in accordance with the terms of Section 5(b) of the TIF Note. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 57 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 57 AQUILA COMMONS CONTINUED 4. Marketing Covenants. Through the term of the TIF Note, the developer must use its best efforts to market available unit interests in the Cooperative to buyers who reside in the City, to the extent permissible under State and federal fair housing and related laws. 5. Management. Upon completion and through the term of the TIF Note, the City must approve the property management company. Three Year Rule: The three-year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Aquila Commons District met the requirement when the City approved the Development Agreement with Aquila Senior LLC. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule to increase it by an additional two years for districts that were certified on or after January 1, 2005 and before April 20, 2009. The Aquila Commons district falls within this timeline and the Four-Year Rule was deadline becomes April 2011. The district met this requirement by April 2009. Five Year Rule: At least 80% of tax increment revenues generated within Aquila Commons Housing must be used to pay for qualified costs within the district. However, pursuant to MN Statute 469.1763 subd. 2 (b), activities for affordable housing projects spent in the project area is considered an activity within the district. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 58 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 58 AQUILA COMMONS CONTINUED Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 2009. Recommendation: 1. Use of Future TIF After Obligation is Repaid. The TIF Note for this District was paid off on August 1, 2018. The City/EDA elected to keep the District open through its termination (December 31, 2032). The existing fund balance and the TIF generated in the future (approximately $229,000 annually) will need to be utilized to pay eligible costs for “housing projects” as defined by MS 469.174, Subd. 11, located anywhere within the City limits. A housing project is a rental or owner-occupied housing development intended for occupancy by low and moderate-income families. The income guidelines are defined in MS 469.1761 as follows: Rental Housing: 20% of the units occupied by families at 50% of median income (20/50) or 40% of the units occupied by families at 60% of median income (40/60). Owner Occupied: Assistance to homeowners with an income at or below 100% of the median income for a family of two or less or 115% of the median income for a family of three or more. TIF is utilized for capital expenditures and examples of potential rental housing projects would include:  New affordable rental housing as part of redevelopment (20/50 or 40/60 election)  Renovation of an existing rental housing development (20/50 or 40/60 election)  Providing subsidy to an existing project that is earmarked for additional affordability (20/50 or 40/60 election) Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 59 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 59 AQUILA COMMONS CONTINUED Examples of potential owner-occupied projects would include:  Site acquisition and demolition for infill lots that will be sold for new housing construction  Acquisition of foreclosed homes for resale to income qualified buyers  Rehabilitation loans for home improvements (including HIA owners)  Second mortgages to qualified home buyers Due to the on-going need to fund the City’s single-family, owner-occupied housing rehab program (to income qualified residents), the current policy around inclusionary housing and the EDA’s/Council’s expressed desire to retain naturally occurring affordable housing (NOAH), we recommend that the EDA/City keep this District open (just like they did with Park Center) and utilize the funds for affordable housing projects within the City. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 60 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 60 AQUILA COMMONS CONTINUED City of St. Louis ParkAquila CommonsORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeHousing Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 3.4%At or Under LimitFiscal DisparitiesB ElectionCounty Number1311Frozen RateUTA #1 114.271% 0.000% 0.000%UTA #2 0.000%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income TOTAL REVENUESProject Interest ExpenseAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSEOriginal Budget2007 9/7/2004 12/20/2004 4/4/2005 12/31/2032 12/31/2032‐                          ‐                          ‐                          Cumulative Modified7,271,716              7,271,716              5,750,000               794,544                  727,712                 7,272,256               7,272,256              End of District Projected Actual Total4,975,543               10,208                    4,069,824              ‐                           1,551,143               153,161                  21,931                     ‐                           3,193,846              3,638,255               4,920,081              Under / (Over) Budget2,296,173               (10,208)                  3,201,892              5,750,000               (756,599)                 574,551                  (21,931)                   ‐                           (3,193,846)             3,634,001               2,352,175              Year Base Current Fiscal Disparities Captured Tax Increment Interest Income TOTAL REVENUESProject PaygoAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE11 2017 16,906                     176,487                  ‐                           159,581                  124.745% 181,535                  145                         181,680                 ‐                          165,416                 5,796                      1,110                      ‐                          ‐                          172,322                 109,855                 12 201816,906                    187,379                 ‐                          170,473                 130.191% 194,003                 1,009                      195,012                 ‐                          124,226                 5,935                      1,139                      ‐                          ‐                          131,300                 173,566                 13 201916,906                    201,643                 ‐                          184,737                 125.012% 210,278                 7,865                      218,143                 4,715                      1,153                      ‐                          ‐                          5,868                      385,841                 14 202016,906                    218,015                 ‐                          201,109                 121.682% 228,980                 228,980                 ‐                          6,869                      1,087                      ‐                          7,956                      606,865                 15 202116,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          6,869                      1,087                      ‐                          193,500                 201,456                 634,390                 16 202216,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 605,416                 17 202316,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 576,441                 18 202416,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 547,467                 19 202516,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 518,492                 20 202616,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 489,518                 21 202716,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 460,543                 22 202816,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 431,569                 23 202916,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 402,594                 24 203016,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 373,620                 25 203116,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 344,645                 26 203216,906                    218,015                 ‐                          201,109                 121.682% 228,982                 228,982                 ‐                          ‐                          6,869                      1,087                      ‐                          250,000                 257,956                 315,671                 27 2033‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                          ‐                          ‐                          ‐                          ‐                          250,000                 250,000                 65,671                    DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 61 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 61 ELMWOOD VILLAGE Description: Elmwood Village (County #1312) is a renewal and renovation district established on August 2, 2004. Originally the district encompassed seventeen (17) parcels of land and was established to facilitate the construction of various public improvements related to the construction of housing and commercial facilities (a portion of this district is derived from parcels decertified from the Trunk Highway 7 TIF District). The District was initially established to assist Rottlund Homes with additional site improvements and land acquisition costs associated with a condominium/townhome project on the old Quadian site. Rottlund was issued a PAYGO note in the amount of $790,000 at 5.75% interest. The note was paid off on February 1, 2010 and the TIF generated from these parcels can be utilized by the City for other qualified TIF costs. On February 21, 2006 this district was modified to add eight additional parcels. The parcels were part of the Hoigaards redevelopment project which consists of a 220-unit market rate apartment building, 100-unit senior independent apartment building, 22 rental townhomes, a mixed-use residential development consisting of 74 condos (temporarily turned rental) over 25,000 square feet retail and a regional storm pond. The City issued short-term taxable tax increment revenue notes to finance costs for the Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 62 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 62 ELMWOOD VILLAGE CONTINUED mixed-use building and the market rate apartment building. The first note was issued in 2006 in the amount of $1,663,000 and the second note was issued in 2007 in the amount of $2,540,000. On October 21, 2010, the EDA issued long-term tax-exempt tax increment revenue bonds to refinance the short-term notes in the amount of $3,495,000 (the A bonds). These revenue bonds are paid from tax increment generated from the Camarata Apartments (220 units) and the Harmony Vista condos/Apartments and retail. Since these are revenue bonds, the EDA does not carry any legal liability to make payments on the bonds if the tax increment generated is insufficient to do so. The bonds were sized with 125% debt service coverage and a debt service reserve fund in the amount of $165,875 was funded with bond proceeds. In addition, the EDA issued a subordinated TIF note in the amount of $935,000 to Northern Holding II, LLC on the same date. This note is paid from increment generated from the Camarata Apartments and Harmony Vista Condos/Apartments and retail on a subordinate basis to the A note (paid from available increment not needed to pay debt service on the A bonds). In 2009, Greco Development purchased a parcel of land from Rottlund for redevelopment into a vertical mixed-use development consisting of 115 units of senior housing over approximately 10,000 sq/ft of retail. On June 7, 2010, the EDA approved a development agreement with Wooddale Catered Living LLC to provide them a PAYGO note in the amount of $490,000. The project is complete and the TIF Note was issued on August 1, 2013. This note was issued for $490,000 and is payable through 95% of increment related to the project. Construction of the last two phases began in 2012. In early 2013, both the Adagio (100-unit senior apartment) and the Medley Row rental townhomes (26-units) were completed. TIF Notes were issued for these projects in 2013 for $1,020,000 ($820,000 for Adagio and $200,000 for Medley Row). Due to the reallocation of the market value homestead credit to market value homestead exclusion in 2011, the tax capacities dropped for the pay 2012 taxes on the Rottlund town homes, thus reducing the amount of TIF generated for use by the EDA. During 2018, $2,530,000 was pooled from this District for the Wooddale Bridge project. In 2019, an additional $407,870 was pooled outside the district. It is estimated that an additional $3.3M for that project in 2022. Further, the projections anticipate an additional $3.9M that could be pooled for projects in the future. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 63 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 63 ELMWOOD VILLAGE CONTINUED Adopted:…………………….….08/02/2004 Requested Date:…….………. 12/20/2004 Certified Date:………….……...05/31/2005 First Increment……………….… 07/2007 Anticipated Decertification……12/31/2029 Modifications:…………………. 02/21/2006 10/19/2009 Special Legislation: In 2009 the City received special legislation to extend the term of the district by 6 years. The duration of the district is now 22 years, versus the original 16 years (Laws of 2009, Chapter 88, Article 5, Section 19). The reason for the extension was to utilize the additional TIF revenue generated to complete improvements to Highway 7 and Wooddale Avenue bridge as well as the Wooddale and 36th Street intersection (see language on page below): Sec. 19. CITY OF ST. LOUIS PARK; EXTENSION OF TAX INCREMENT DISTRICT DURATION. Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the duration of the Elmwood Village Tax Increment Financing District is extended to 22 years after receipt by the St. Louis Park Economic Development Authority of the first increment from the district. In 2016, the City obtained special legislation to increase the pooling percentage from 20% to 30%. (Laws of 2017, 1st Special Session 1, Article 6, Section 21) Sec. 21 CITY OF ST. LOUIS PARK; ELMWOOD VILLAGE TIF DISTRICT; POOLING PERCENTAGE INCREASE. For purposes of the Elmwood Village Tax Increment Financing District in the city of St. Louis Park, including the duration extension authorized by Laws 2009, chapter 88, article 5, section 19, the permitted percentage of increments that may be expended on activities outside the district under Minnesota Statutes, section 469.1763, subdivision 2, is increased to 30 percent for the district. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 64 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 64 ELMWOOD VILLAGE CONTINUED Former and Current PID Numbers: Former PID # New PID #New Use06-028-24-32-002006-028-24-32-0024 and 16-117-21-34-0355Detention Pond (24) and Commercial component of Harmony Vista (including triangular parking parcel)16-117-21-31-006516-117-21-31-0077Medly Row Town Homes (yet to be built)16-117-21-31-006606-028-24-32-0023Camerata Apartments16-117-21-34-001816-117-21-34-0340Adagio Condos (yet to be built)16-117-21-34-007516-117-21-34-003516-117-21-34-0017Same as Former PIDExisting Bldg - No Redev16-117-21-34-0015Same as Former PIDExisting Bldg - No Redev16-117-21-34-002716-117-21-34-000116-117-21-33-010416-117-21-33-0107 through 16-117-21-33-0196; & 16-117-21-34-0146 through 16-117-21-34-0194Senior (55+) Condos16-117-21-34-009516-117-21-34-0218 through 16-117-21-34-0339Village Lofts-Condos16-117-21-34-009616-117-21-34-0100 through 16-117-21-34-0119Elmwood Village-Condos16-117-21-34-009716-117-21-34-0120 through 16-117-21-34-0137Elmwood Village-Condos16-117-21-34-009816-117-21-34-0195 through 16-117-21-34-0217Elmwood Village-Condos16-117-21-33-010516-117-21-33-0197 through 16-117-21-33-0212Elmwood Village-Condos16-117-21-33-0106Same as Former PIDLuther Car Dealership16-117-21-34-0099Same as Former PIDCommon Area (Condos/TH)16-117-21-31-0071Same as Former PIDExisting Building - Industrial (EDA Owned)16-117-21-32-0057Same as Former PIDExisting Building - Office16-117-21-33-0089Same as Former PIDEDA Owned Vacant Land16-117-21-33-0091Same as Former PIDEDA Owned Parking16-117-21-33-0092Same as Former PIDEDA Owned Vacant Land16-117-21-33-0094Same as Former PIDEDA Owned Vacant Land16-117-21-34-003421-117-21-21-005316-117-21-34-0603Center Park16-117-21-34-0355 and 16-117-21-34-0356 thru 16-117-21-34-0604Harmony Vista Condos (includes garage stalls and hallways)16-117-21-34-0607Woodale Catered Living Apts Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 65 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 65 ELMWOOD VILLAGE CONTINUED Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 114.2710% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a renewal and renovation district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. In addition, pursuant to the TIF plan the dollars can be utilized for improvements of a grade separated crossing for Wooddale Avenue at Highway 100. Obligations: There are four (4) Tax Exempt TIF Revenue Bonds, one (1) PAYGO Note and one (1) Interfund Loan that were issued for the projects within this district as follows:  $3,495,000 Tax Exempt TIF Revenue Bond, Series 2010A. This Bond was issued on October 21, 2010 and sold to third party investors. The EDA has pledged 95% of the tax increment revenues from the project. This Bond will be paid in full on February 1, 2023.  $935,000 Tax Exempt TIF Revenue Bond, Series 2010B. This Bond was issued on October 21, 2010 and was privately placed. This Bond is subordinated to the 2010A bonds and is paid from 95% of the tax increment revenues from the project. This Bond were repaid in full on February 1, 2018.  $490,000 TIF Note at 6.5% interest. This Note was issued to Wooddale Catered Living on August 1, 2013. The EDA has pledged 95% of the tax increment revenues from the project. This Note was paid in full by February 1, 2017. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 66 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 66 ELMWOOD VILLAGE CONTINUED  $3,298,200 Interfund Loan for site improvements. The EDA approved an interfund loan on December 20, 2010 for public improvements associated with the District and will be repaid from 100% of the TIF generated from the extension of the District. The IFL was for up to $5 million in expenditures. Originally, the City, advanced $3,298,200 of the loan based upon the 5-year rule date of May 31, 2015. Subsequent to the 2017 Special Legislation, the City increased the amount authorized under the interfund loan to $7 million on resolution 17-22. At year-end 2019, the balance of the interfund loan was $3,015,424. The 2018 pooled expenditures for the Wooddale Bridge project did not increase the balance of the loan. It is anticipated that additional pooling expenditures in 2022 should increase the balance of the interfund loan by approximately $3,881,130. Any additional amounts would increase the principal amount of the loan over the amount authorized.  $820,000 Tax Exempt TIF Revenue Note of 2013A. This bond was issued on July 29, 2013 and is payable at 4.0% to Webster LLC for the Adagio Senior Apartments. This Note was paid in full on August 1, 2019.  $200,000 Tax Exempt TIF Revenue Note of 2013B. This bond was issued on July 29, 2013 and is payable at 4.00% to Medley Row Town Homes. This Note was paid in full by August 1, 2019. Other Development Agreement Compliance: ROTTLUND 1. Look Back. Within 60 days after closing to third parties of the final unit a look back would be completed. If, based on such review, the actual profit for the Developer exceeds a 12% rate of return, then 50 percent of excess amount of profit was to be applied as prepayment of the outstanding principal amount of the Note. The look back was completed in 2008 and the developer‘s expected rate of return was below the 12% threshold so there was no excess profit to prepay the TIF note. HOIGAARD VILLAGE 1. Association and Apartment Covenants. The City shall be entitled to review and approve the articles, bylaws and declaration of restrictive covenants for the condominium association and sub-associations Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 67 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 67 ELMWOOD VILLAGE CONTINUED 2. Special Service District. Upon written request by the City, the developer will submit required petition to establish a special service district encompassing the redevelopment property and any other property identified by the City, and to levy a special service charge. 3. Look Back. Within 60 days after closing to third parties of the final unit a look back would be completed for each Stage of the project, excluding Stage IV). If, based on such review, the actual profit for the Developer exceeds the rate of return specified for each Stage, then 50 percent of excess amount of profit was to be applied as prepayment of the outstanding principal amount of the Note. The look back was completed in 2008 and the developer‘s expected rate of return was below the 12% threshold so there was no excess profit to prepay the TIF note. WOODDALE CATERED LIVING LLC. 1. Termination of right to Note. All conditions for delivery of the Note must be met by no later than March 31, 2012, which date is less than ten (10) years after the date of certification of the TIF District by the County and complies with the so-called five-year rule under Section 469.1763, subd. 3(c) of the TIF Act, as amended during the 2009 State legislative session. 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2012 shall be $6,825,000 and the minimum market value as of January 2, 2013 shall be $13,650,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Look Back. Within 60 days after the earliest of (i) stabilization (95% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 20% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The look back was completed in 2013 and the developer‘s expected IRR was below the 20% threshold so there was no excess profit to prepay the TIF note. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 68 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 68 ELMWOOD VILLAGE CONTINUED 4. Management. The Developer shall at all times engage a property management company with substantial experience in operating mixed-use developments, subject to approval by the Authority, which approval will not be unreasonably withheld. The Developer will annually submit evidence of such management by February 1 of each year. 5. Plaza. The Developer shall construct an outdoor Plaza as depicted in the Site Plan. 6. Special Service District. Upon written request by the City, the developer will submit required petition to renew any levy of special service charges for Special Service District No. 6. By no later than December 31, 2011, the developer shall submit to the City for review and approval a plan for maintenance and operation of all pedestrian and landscaping improvements located within the redevelopment property Three Year Rule: The three-year rule states that, within three years from certification date, bonds much be issued, the authority has acquired land or has caused public improvements to be constructed in the district. The Elmwood District met the requirement when the City approved the Development Agreement with Union Land II LLC in March 2006. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Elmwood Renewal and Renovation district fits this timeline and its four-year rule was May 2011. The City reported on the four-year activity in November 2009 and reported to the County that two parcels did not meet the deadline for qualifying activity. They were 16-117-21-34-0034 (Center Park) and 16-117-21-21-0053 (Center Park). Parcel 16-117-21-34-0034 was reinstated to the district for payable 2011. Parcel 16-117-21-21-0053 has not been reinstated but is not necessary since it will remain a tax-exempt use. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 69 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 69 ELMWOOD VILLAGE CONTINUED Five Year Rule: At least 80% of tax increment revenues generated within Elmwood Village must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Elmwood Village Renewal and Renovation district fits this timeline and the five-year rule was May 31, 2015 for the original area and February 21, 2016 for the modified area (Hoigaards redevelopment area). The five-year rule was met for the original area since the EDA has entered into contracts and obligated TIF dollars prior to that time. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after May 2010. Recommendation: 1. Pooling Analysis and Use of Funds. During 2018, $2,532,200 was used for the Wooddale Bridge project. In 2019, an additional $407,870 pooling was used for the bridge. If the additional pooling is used in 2022, it is estimated that there will be an additional $3.9M pooling for qualified redevelopment costs when the District decertifies in 2029. We would recommend the City/EDA create a plan for its use. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 70 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 70 ELMWOOD VILLAGE CONTINUED City of St. Louis ParkElmwood VillageORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRenewal and Renovation Admin Expense2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 20192.8%At or Under LimitFiscal DisparitiesB ElectionCounty Number1312Frozen RateUTA #1 114.271% 0.000% 0.000%UTA #2 0.000%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income Other Revenue TOTAL REVENUESProject Interest ExpenseInterfund LoanAdmin Expense County Admin Outside District TOTAL EXPENSEOriginal Budget2007 8/2/2004 12/20/2004 5/31/2005 12/31/2029 12/31/2029‐                          ‐                          ‐                          Cumulative Modified44,100,000            44,100,000            13,590,000             26,100,000            4,410,000              44,100,000             44,100,000            End of District Projected Actual Total39,249,939            563,893       151,060                 8,633,000                 46,120,431            6,769,007              956,050                 566,314                 954,776                 235,578                 8,836,865            4,653,075            1,111,894            1,883,738            445,221                 63,326                    6,270,058              32,745,902            32,745,902            Under / (Over) Budget4,850,061              (563,893)      (151,060)                (8,633,000)                (2,020,431)            6,820,993              25,143,950            (566,314)                (954,776)                (235,578)                (8,836,865)          (4,653,075)          (1,111,894)          (1,883,738)          3,964,779              (63,326)                  (6,270,058)             11,354,098            11,354,098            YearBaseCurrent Fiscal Disparities CapturedTax IncrementOther Revenue Interest Income Bond ProceedsTOTAL REVENUESProject Rottlund GreccoAdagio Medey Row Refunded Bonds 2010A 2010B Interfund LoanAdmin Expense County Admin Outside District TOTAL EXPENSE15 2018168,836                 1,911,784              17,650                    1,725,298              130.191% 1,875,124              18,642                    ‐                             1,893,766              ‐                          239,731                 54,578                    ‐                        365,869               83,852                 111,517               8,768                      5,104                      2,532,188              3,401,606              (2,873,488)            16 2019168,836                 1,958,006              23,776                    1,765,394              125.012% 2,014,165              9,830                      ‐                             2,023,995              ‐                          165,029                 66,848                    ‐                        367,500               115,978               8,973                      5,075                      407,870                 1,137,273              (1,986,766)            17 2020168,836                 2,173,854              29,977                    1,975,041              121.682% 2,196,695              ‐                             2,196,695              ‐                          ‐                          ‐                          ‐                        377,625               120,617               8,973                      4,954                      512,169                 (302,240)                18 2021168,836                 2,195,593              30,277                    1,996,480              121.682% 2,273,184              ‐                             2,273,184              ‐                          ‐                        381,625               91,442                 5,000                      4,954                      ‐                          483,021                 1,487,924              19 2022168,836                 2,217,548              30,580                    2,018,133              121.682% 2,297,839              ‐                             2,297,839              ‐                          ‐                        389,625               61,099                 4,954                      3,330,000              3,785,678              84                           20 2023168,836                 2,239,724              30,885                    2,040,003              121.682% 2,322,739              ‐                             2,322,739              ‐                          ‐                        328,000               162,743               10,000                    4,954                      ‐                          505,697                 1,817,126              21 2024168,836                 2,262,121              31,194                    2,062,091              121.682% 2,347,889              ‐                             2,347,889              ‐                          ‐                          ‐                        135,253               10,000                    4,954                      ‐                          150,207                 4,014,808              22 2025168,836                 2,284,742              31,506                    2,084,400              121.682% 2,373,290              ‐                             2,373,290              ‐                          ‐                          ‐                        106,663               10,000                    4,954                      ‐                          121,617                 6,266,481              23 2026168,836                 2,307,590              31,821                    2,106,933              121.682% 2,398,946              ‐                             2,398,946              ‐                          ‐                          ‐                        76,930                 10,000                    ‐                          86,930                   8,578,497              24 2027168,836                 2,330,666              32,139                    2,129,690              121.682% 2,424,857              ‐                             2,424,857              ‐                          ‐                          ‐                        46,007                 10,000                    ‐                          56,007                   10,947,348            25 2028168,836                 2,353,972              32,461                    2,152,676              121.682% 2,451,028              ‐                             2,451,028              ‐                          ‐                          ‐                        13,847                 10,000                    ‐                          23,847                   13,374,529            26 2029168,836                 2,377,512              32,785                    2,175,891              121.682% 2,477,461              ‐                             2,477,461              ‐                          ‐                          ‐                        (0)                          ‐                          ‐                          (0)                             15,851,990            27 2030‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                             ‐                          ‐                          ‐                          ‐                        ‐                          ‐                          ‐                          15,851,990            28 2031‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                             ‐                          ‐                          ‐                          ‐                        ‐                          ‐                          ‐                          15,851,990            29 2032‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                             ‐                          ‐                          ‐                          ‐                        ‐                          ‐                          ‐                          15,851,990            30 2033‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                             ‐                          ‐                          ‐                          ‐                        ‐                          ‐                          ‐                          15,851,990            Ending BalanceCASH FLOW PROJECTIONS ROLL UPTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpenditures DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSBondsPaygoTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 71 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 71 HIGHWAY 7 CORPORATE CENTER Description: Highway 7 Business Center (redevelopment district) and the Highway 7 Hazardous Substance Subdistrict (County #1313) were established on May 15, 2006. Originally the district encompassed five (5) parcels of land and was established to facilitate the cleanup of contaminated land and the construction of a 78,000 square foot multi-tenant office/showroom/tech building. The City also received environmental grant funds from Hennepin County, the Minnesota Department of Employee and Economic Development and the Metropolitan Council in the amount of $4,950,000, $1,904,456 and $967,000 respectively. A development agreement was signed on June 28, 2006 with the Highway 7 Business Center LLC in which the developer agreed to construct a 78,000 square foot multi-tenant industrial building, including all related parking improvements. Adopted………………….... 05/15/2006 Requested Date……………. 06/29/2006 Certified Date………….….. 07/17/2006 First Increment…………..…. .… 07/2007 Required Decertification…… 12/31/2032 Anticipated Decertification…. 12/31/2027 Before After Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 72 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 72 HIGHWAY 7 CORPORATE CENTER CONTINUED Former and Current PID Numbers: Former PIDFormer UseNew PIDNew Use17-117-21-44-0002Vacant Land17-117-21-44-0023Multi Tenant17-117-21-44-0024LBF17-117-21-44-0060 Caryn International School17-117-21-44-0065Golden AutoHwy 7 Corporate Center17-117-21-44-006917-117-21-44-0070 Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 107.2660% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. MN Statute 469.176 subd. 4e specifies the activities on which tax increment from a hazardous substance subdistrict may be spent. In general, tax increment must be spent only on removing hazardous substances from the site, pollution testing and related administrative and legal costs. Obligations: There are four (4) PAYGO notes, totaling $2,555,000 that were issued for this project on July 24, 2008 (Note A and B) and October 6, 2008 (Note C & D) as follows:  $2,100,000 PAYGO Note A for Highway Business center LLC paid at 1% interest. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 73 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 73 HIGHWAY 7 CORPORATE CENTER CONTINUED  $360,000 PAYGO Note B for Highway Business Center LLC paid at 1% interest.  $72,000 PAYGO Note C for Highway Business Center LLC paid at 1% interest.  $23,000 PAYGO Note D for Highway Business Center LLC paid at 1% interest. These Notes are paid from 95% of the available increment. The available increment is prorated semi-annually with the TIF payments prorated to Notes A and B first before payment is made to Notes C and D 86% being paid to the A Note and 14% being paid to the B Note. It is anticipated that the Notes A and B will be repaid in 2027 and Notes C and D will be repaid in 2028. Other Development Agreement Compliance: 1. Railroad Easement. By December 31, 2006, the Developer agrees to execute and deliver to the City the Railroad Easement Agreement. Under the Easement Agreement, the Developer grants to the City an easement for railroad right of way purposes on a portion of the property. 2. Look Back. (a) Within 60 days before any Transfer of the property (excluding any Transfer to an Affiliate) that occurs within five years after the date of issuance of the Certificate of Completion, the Developer must deliver to the EDA evidence of its annualized cumulative internal rate of return from the property (the “IRR”), calculated as of the date of closing on the transfer. The IRR shall be calculated with equity, revenues and expenses all determined in accordance with generally accepted accounting principles, provided that the amount of Developer’s equity must exclude the principal amount of the Notes, and any developer’s fee in excess of 7.0 percent of total development costs. The amount by which the IRR exceeds 12.0 percent is a percentage referred to as “Excess Percentage.” The Excess Percentage, multiplied by Redeveloper’s equity (as calculated for purposes of determining the IRR), is the “Participation Amount.” The Redeveloper must pay 50 percent of the Participation Amount to the Authority upon closing on the Transfer. If the Developer does not affect a Transfer within the five-year period, the Developer’s obligation under this Section is deemed terminated. The CO was issued on November 21, 2007, which means the 5-year period would expire on November 21, 2012. In June 2012 the City completed the required lookback calculation since the property was going to be sold in July 2012. It was determined that the development did not cash flow as expected and therefore had a negative Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 74 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 74 HIGHWAY 7 CORPORATE CENTER CONTINUED IRR. There was no reduction in the principal amount of the TIF Notes due to this and the property was sold to Ax Rer LP (Artis Reit). 3. Assessment Agreement. The Developer shall execute a Minimum Assessment Agreement (MAA). The minimum market value shall be $6,300,000 as of January 2, 2008 and each January 2 thereafter, notwithstanding the progress of construction of the Minimum Improvements by such date. Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Highway 7 Corporate Center Redevelopment district fits this timeline and its four-year rule was July 17, 2012 and was met because qualifying activities happened prior to this date. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years from the certification date for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Highway 7 Corporate Center Redevelopment district fits this timeline and its five-year rule is now July 17, 2016. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2012. Recommendations: None at this time. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 75 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 75 HIGHWAY 7 CORPORATE CENTER CONTINUED City of St. Louis ParkTrunk Hwy 7ORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopmentAdmin Expense2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently:for year 2019At or Under LimitFiscal DisparitiesB ElectionCounty Number1313Frozen RateUTA #1 107.266%0.000%0.000%UTA #20.000%UTA #30.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income TOTAL REVENUESProjectAdmin Expense County AdminOther ExpenseTOTAL EXPENSEOriginal Budget2007 5/15/2006 6/30/2006 7/17/2006 12/31/2032 12/31/2027‐                          ‐                          ‐                          Cumulative Modified4,181,054              4,181,054              3,135,784        627,165              418,105              4,181,054              4,181,054              End of District Projected Actual Total2,977,319              5,648                      2,982,967              26,862             2,293,987          393,255             87,207            27,943            119,659              11,790              ‐                  2,960,703              2,960,703              Under / (Over) Budget1,203,735              (5,648)                     1,198,087              3,108,922        (1,666,822)         (393,255)            (87,207)           (27,943)           298,446              (11,790)            ‐                  1,220,351              1,220,351              YearBaseCurrent Fiscal Disparities CapturedTax Increment Interest Income TOTAL REVENUESProject Note A Note B Note C Note DAdmin Expense County AdminIncrement ReturnedTOTAL EXPENSE10 2016‐                          187,796                 39,851                    147,945                 128.561% 158,123                 158,123                 ‐                    110,530              18,948               6,068                  738                   ‐                  136,284                 76,584                   11 2017‐                          188,546                 44,027                    144,519                 124.745% 115,413                 114                         115,527                 ‐                    114,330              19,599               4,870                  731                   ‐                  139,530                 52,581                   12 2018‐                          172,530                 40,754                    131,776                 130.191% 140,843                 99                           140,942                 ‐                    99,929                17,131               5,284                  717                   ‐                  123,060                 70,462                   13 2019‐                          172,530                 78,978                    93,552                    125.012% 142,195                 423                         142,618                 ‐                    114,768              19,674               5,253                  711                   ‐                  140,406                 72,674                   14 2020‐                          176,130                 40,722                    135,408                 121.682% 144,722                 363                         145,085                 ‐                    116,341              19,944               5,253                  738                   ‐                  142,276                 75,483                   15 2021‐                          176,130                 40,722                    135,408                 121.682% 144,724                 377                         145,101                 ‐                    117,366              20,120               5,253                  738                   ‐                  143,477                 77,107                   16 2022‐                          176,130                 40,722                    135,408                 121.682% 144,724                 386                         145,109                 ‐                    117,366              20,120               5,253                  738                   ‐                  143,477                 78,739                   17 2023‐                          176,130                 40,722                    135,408                 121.682% 144,724                 394                         145,118                 ‐                    117,366              20,120               5,253                  738                   ‐                  143,477                 80,380                   18 2024‐                          176,130                 40,722                    135,408                 121.682% 144,724                 402                         145,126                 ‐                    117,366              20,120               5,253                  738                   ‐                  143,477                 82,028                   19 2025‐                          176,130                 40,722                    135,408                 121.682% 144,724                 410                         145,134                 ‐                    117,366              20,120               5,253                  738                   ‐                  143,477                 83,685                   20 2026‐                          176,130                 40,722                    135,408                 121.682% 144,724                 418                         145,142                 ‐                    117,366              20,120               ‐                   ‐                   5,253                  738                   ‐                  143,477                 85,350                   21 2027‐                          176,130                 40,722                    135,408                 121.682% 144,724                 427                         145,151                 ‐                    69,236                11,869               53,563            ‐                   5,253                  738                   ‐                  140,658                 89,842                   22 2028‐                          176,130                 40,722                    135,408                 0.000%‐                          ‐                          ‐                    ‐                      ‐                       33,644            27,943            5,253                  738                   ‐                  67,578                   22,264                   23 2029‐                          176,130                 40,722                    135,408                 0.000%‐                          ‐                          ‐                    ‐                      ‐                      ‐                   ‐                   ‐                      ‐                  ‐                          22,264                   24 2030‐                          176,130                 40,722                    135,408                 0.000%‐                          ‐                          ‐                    ‐                      ‐                  ‐                          22,264                   25 2031‐                          176,130                 40,722                    135,408                 0.000%‐                          ‐                          ‐                    ‐                      ‐                  ‐                          22,264                   26 2032‐                          176,130                 40,722                    135,408                 0.000%‐                          ‐                          ‐                    ‐                      ‐                  ‐                          22,264                   27 2033‐                          ‐                          ‐                          ‐                          0.000%‐                          ‐                          ‐                    ‐                      ‐                      ‐                  ‐                          22,264                    DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetInterest Expense on PaygoID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 76 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 76 WEST END Description: West End (County #1314) is a redevelopment district that was established on November 19, 2007. Originally the district encompassed six (6) parcels of land and was established to facilitate the redevelopment of a site near I-394 and Highway 100 into approximately 1.5 million square feet of office, 350,000 square feet of retail, 124 hotel units and a 120-unit luxury apartment building by Duke Realty. Subsequent to Duke Realty’s acquisition of the parcels, the property has been replatted into 9 parcels. The EDA executed a Development Agreement with Duke Realty Limited Partnership on December 17, 2007. The EDA provided Duke Realty a PAYGO note in a maximum principle of $21.1 million at 6.75% interest. In addition to the PAYGO note, the City issued $5,490,000 in GO TIF bonds in 2008 to pay for various public improvements in the area, which have a priority claim on annual TIF revenue. On May 17, 2010 and November 21, 2011, the EDA entered into the first amendment to the contract to describe the party’s respective responsibilities regarding redevelopment of property in the District. On May 8, 2015, the EDA entered into a second amended and restated contract with Duke Realty Limited Partnership and Central Park West LLC. This amendment assigned rights and obligations of Duke to Central Park West LLC, further defined the new phasing plan and updated timing of construction of the various phases. On May 2, 2016 the EDA entered into its third amendment to the contract with Central Park West LLC, Millennium Phase II LLC ad ACSLP LLC. This amendment stated what properties Central Park West had assigned to the other developers for the Millennium Apartments and to modify the construction schedule. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 77 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 77 WEST END CONTINUED To date the Homewood Suites hotel (2009), 350,000 sq/ft of retail (2011), the 119-unit Flats at West End Apartments (2013) and the 158-unit Millennium apartments (2015) have been constructed. Duke sold the retail and undeveloped portion of the project in 2015 to American Realty Capital-Retail Centers of America Inc. Duke then sold the eastern portion of the redevelopment site to several developers for various aspects of the remaining development, once sufficient pre-leasing commitments have been secured. The plan is to construct ½ of the structured parking (1,214 stalls) and will include approximately 5,000 sq/ft of shared outdoor amenity space, 3,500 sq/ft of covered retail at ground level a fitness facility, public locker rooms, and an indoor bike room that can be accessed from the linear civic space. TPI Hospitality completed construction in early 2018 on a 126-room AC Hotel by Marriott. It features approximately 3,000 sq/ft of restaurant/lounge area, 1,000 sq/ft of meeting space and a spa. DLC Residential completed construction in late 2017 on Central Park West Apartment (building #1) which is a 6-story apartment complex with 199 units (approximately 115 in the City and the remaining 84 in Golden Valley). It plans to begin Building #2 in the spring of 2018. It is expected to be six stories and be comprised of 164 housing units. The Excelsior Group and Ryan Companies have begun construction in late 2019/early 2020 on an 11-story Class A office building with adjacent structured parking (Phase IV) Adopted………………..…… .11/19/2007 Requested Date…………..…06/30/2008 Certified Date……………… 07/09/2008 First Increment……..…….…… 07/2011 Anticipated Decertification....12/31/2036 Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 78 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 78 WEST END CONTINUED Former and Current PID Numbers: Property AddressFormer PID # Former UseNew PID #'sNew Use30-029-24-32-0031 thru 0033 Office Bldgs - Land East of Utica30-029-24-32-0028 thru 0029 Apartments, Retail30-029-24-32-0019 Millennium Apartments30-029-24-32-0020 Olive Garden30-029-24-32-0021 The Flats at West End30-029-24-32-0022 Rainbow Grocery 30-029-24-33-0031 Shops at West End1600 Utica 30-029-24-33-0019 None This is now a portion of Utica Ave-No PID1621 Park Place 30-029-24-33-0002 Tennis Club 30-029-24-33-0031 Shops at West End30-029-24-32-0025 Homeward Suits Hotel30-029-24-32-0026 Existing Bank - Building5353 Wayzata Blvd 30-029-24-32-0015 Existing Bank5201 Wayzata 30-029-24-32-0018 Commercial5245 Wayzata 30-029-24-32-0007 Chilis & Olive Garden1551 Park Place 30-029-24-32-0011 Novartis Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 103.0550% Allowable Uses: MN Statute 469.176 subd. 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 79 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 79 WEST END CONTINUED Obligations: There is one GO Tax Increment Bond (2 purposes) and one PAYGO Note for this district as follows:  $5,490,000 GO Tax Increment Bonds, Series 2008B - $4,965,000 Senior TIF Bonds and $525,000 5% Admin Bonds. These bonds mature on February 1, 2024.  $21,100,000 PAYGO Note - This Note was issued to Duke Realty on November 1, 2010 at 6.75%. The EDA has pledged 95% of the tax increment revenues from the project for a twenty-one (21) year term (end date of August 1, 2031). The City issued the 2008B TIF Bonds to pay for such public improvements as the reconstruction of Duke Place Boulevard, required for the West End development. Pursuant to the Development Agreement, the City could issue TIF Bonds that produced net proceeds (after deducting costs of issuance, discount and capitalized interest) in the amount of $4,500,000 (Senior TIF Bonds) and were required to have 120% debt service coverage. These Bonds have a first priority on the TIF and are paid from 95% of the increment generated by all property in the TIF District. If the increment generated is insufficient to make the Senior TIF Bond payments, then Duke Realty is required to make up this shortfall within 20 days of receipt of notice from the EDA (failure by the EDA to provide this notice does not relieve Duke Realty of its obligation to make the required payment). The City could also issue a bond of any size it determined that is secured in whole or in part by any portion of the 5% of Tax Increments that are withheld by the EDA as administration fee. These Bonds were issued as part of the 2008B TIF Bond issue and had a principle amount of $525,000. Other Development Agreement Compliance: 1. LEED Certification. The core and shell of all office facilities are required to be LEED-certified (or at least meet current LEED requirements). 2. Outdoor Gathering Spaces. The Redeveloper will provide outdoor gathering spaces and at least one 5,000-square foot indoor gathering space, that are privately owned by and available for public use (this includes public restrooms). The City and Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 80 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 80 WEST END CONTINUED Duke Realty will enter into use agreements regarding these spaces to describe their respective responsibilities regarding procedures for notice and comment about activities, insurance and the like. 3. Neighborhood Police Station. The Redeveloper will provide to City, without charge, approximately 250 square feet of finished space in Phase IIA for use as a neighborhood City police station. Upon completion, Duke Realty must operate and maintain the facility at their cost, including cleaning, heat and electricity. 4. Minimum Assessment Agreement. The Redeveloper is required to execute a Minimum Assessment Agreement (MAA) for each phase. The Phase IIA MAA (retail portion) has been executed and states that the minimum market value shall be $70,216,260 on January 1, 2009 for payable 2010 and shall be in effect for the term of the obligation. A Minimum Assessment Agreement with WEA, LLC for Phase IIC for the Flats at West End at $15,470,000 was also executed. In addition, upon completion of each Central Park West’s six (6) phases, they are required to enter into a in MAA, of which the market value for each agreement will be mutually determined by the parties based upon final construction plans. 5. Lookback Provision. The EDA was required to perform a “lookback” calculation 60 days after the earliest of (i) the date a Phase or facility reaches 95% lease-up; (ii) the date of any Transfer in whole or in part of the subject Phase or facility; or (iii) three years after the date of issuance of the Certificate of Completion for the Phase or subject facility (September 30, 2012). The Redeveloper had to submit evidence of its Yield on Total Project Costs, which is Net Operating Income in the year of the calculation divided by Total Project Costs to date. If that result is more than 15%, the EDA and Redeveloper share equally in the excess income. The EDA’s share is used to pay off outstanding PAYGO TIF Notes. The property was sold in 2015 and the lookback was completed. Since the yield to the developer was not more than 15%, there was no reduction in the Note. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 81 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 81 WEST END CONTINUED Four Year Rule: MN Statute 469.176 subd. 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The West End Redevelopment district fits this timeline and its four-year rule is now July 9, 2014. Since qualifying redevelopment activities have been completed, the four-year rule has been met. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The West End Redevelopment district fits this timeline and its five-year rule was July 9, 2018. Geographic Enlargements: MN Statute 469.175 subd. 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2013. Recommendations: 1. Use of Future TIF After Obligation is Repaid. The last payment on the TIF Note for this District will be on August 1, 2031. Currently there is approximately cash balance $762,546 in the District for use on redevelopment projects, which represents the actual cash balance at December 21, 2020 after the estimated payments due on February 1, 2021 are paid. During 2019, $100,000 was used for the Southwest Light Rail Transit project. It is estimated that there will be approximately $3.2M available for pooling for qualified redevelopment costs when the obligations are paid in August 2031 if the District is modified to allow for an additional 10% pooling for housing. This modification can be done before the obligation is paid, or 2031. This would allow approximately $5.2M to be used for affordable housing. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 82 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 82 WEST END CONTINUED City of St. Louis ParkWest EndORIGINALInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 0.25% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 2.1%At or Under LimitFiscal DisparitiesB ElectionCounty Number1314Frozen RateUTA #1 103.055%UTA #2 0.000%UTA #3 0.000%Current Year 2019First Receipt City Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income Other Revenue TOTAL REVENUES ProjectInterest Expense Bonds Interfund Loan Admin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget2011 11/19/2007 6/30/2008 7/9/2008 12/31/2036 12/31/2036‐                          ‐                          ‐                          Cumulative Modified143,914,895          143,914,895         95,000,000             34,523,405             14,391,490            143,914,895          143,914,895         End of District Projected Actual Total62,601,982             318,424               5,490,000        44,777,057            5,402,854               36,447,212             7,793,222             312,999                328,726                  83,482                     100,000                  9,531,119              42,351,900             59,999,615            Under / (Over) Budget81,312,913             (318,424)             (5,490,000)      99,137,838            89,597,146             (1,923,807)              (7,793,222)           (312,999)               14,062,764             (83,482)                   (100,000)                 (9,531,119)             101,562,995          83,915,280            (237,977)                 118,804.80            (237,977)                Year Base CurrentFiscal DisparitiesCapturedTax Increment Interest Income Other Revenue TOTAL REVENUESProjectPaygoBonds Interfund LoanAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE7 2017859,520                 3,575,601          631,280           2,084,801          124.745% 2,076,586              2,839                  ‐                    2,079,425              35,440                    1,078,322              552,813               19,086                 12,637                    3,351                      ‐                          ‐                          1,701,649              799,732                 8 2018859,520                 3,637,813          663,534           2,114,759          130.191% 2,500,563              4,531                  ‐                    2,505,094              ‐                          1,614,363              556,612               19,086                 19,808                    3,282                      ‐                          ‐                          2,213,151              1,091,674              9 2019859,520                 4,166,046          685,269           2,621,257          125.012% 2,360,794              15,302                ‐                    2,376,096              ‐                          1,919,765              559,613               19,086                 11,839                    3,770                      100,000                 ‐                          2,614,073              853,697                 10 2020859,520                 4,442,268          726,751           2,855,997          121.682% 2,746,899              4,268                  ‐                    2,751,167              ‐                          2,184,906              565,563               24,873                 6,867                      3,770                      2,785,979              818,886                 11 2021859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              4,094                  ‐                    2,936,746              ‐                          2,178,434              569,300               22,366                 7,332                      3,770                      ‐                          ‐                          2,781,202              974,430                 12 2022859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              4,872                  ‐                    2,937,524              ‐                          2,182,896              571,913               19,735                 7,332                      3,770                      ‐                          ‐                          2,785,646              1,126,309              13 2023859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              5,632                  ‐                    2,938,284              ‐                          2,183,146              573,400               16,972                 7,332                      3,770                      ‐                          ‐                          2,784,620              1,279,973              14 2024859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              6,400                  ‐                    2,939,052              ‐                          2,179,712              583,181               14,070                 7,332                      3,770                      ‐                          ‐                          2,788,065              1,430,960              15 2025859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              7,155                  ‐                    2,939,807              ‐                          2,675,928              ‐                        11,024                 7,332                      3,770                      ‐                          ‐                          2,698,053              1,672,714              16 2026859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              8,364                  ‐                    2,941,016              ‐                          2,675,928              ‐                        7,825                    7,332                      3,770                      ‐                          ‐                          2,694,854              1,918,875              17 2027859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              9,594                  ‐                    2,942,246              ‐                          2,675,928              ‐                        4,466                    7,332                      3,770                      ‐                          ‐                          2,691,495              2,169,626              18 2028859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              10,848                ‐                    2,943,500              ‐                          2,675,928              ‐                        939                       7,332                      3,770                      ‐                          ‐                          2,687,969              2,425,158              19 2029859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              12,126                ‐                    2,944,778              ‐                          2,675,928              ‐                        7,332                      3,770                      ‐                          ‐                          2,687,029              2,682,906              20 2030859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              13,415                ‐                    2,946,067              ‐                          2,675,928              ‐                        7,332                      3,770                      ‐                          ‐                          2,687,029              2,941,944              21 2031859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              14,710                ‐                    2,947,362              ‐                          2,675,928              ‐                        7,332                      3,770                      ‐                          ‐                          2,687,029              3,202,276              22 2032859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              16,011                ‐                    2,948,663              ‐                          ‐                          ‐                        7,332                      3,770                      ‐                          1,906,224              1,917,325              4,233,614              ‐                      23 2033859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              21,168                ‐                    2,953,820              ‐                          ‐                          ‐                        7,332                      3,770                      ‐                          1,906,224              1,917,325              5,270,109              ‐                      24 2034859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              26,351                ‐                    2,959,003              ‐                          ‐                          ‐                        7,332                      3,770                      ‐                          1,906,224              1,917,325              6,311,786              ‐                      25 2035859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              31,559                ‐                    2,964,211              ‐                          ‐                          ‐                        7,332                      3,770                      ‐                          1,906,224              1,917,325              7,358,671              ‐                      26 2036859,520                 4,442,268          726,751           2,855,997          121.682% 2,932,652              36,793                ‐                    2,969,445              ‐                          ‐                          ‐                        7,332                      3,770                      ‐                          1,906,224              1,917,325              8,410,791              ExpendituresTotal Budget DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF PLAN BUDGET ANALYSISTIF YearTAX CAPACITYCurrent Local    Tax RateRevenuesExpendituresEnding BalanceDecertifies RevenuesCASH FLOW PROJECTIONS ROLL UPID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 83 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 83 ELLIPSE ON EXCELSIOR Description: Ellipse on Excelsior (County #1315) is a redevelopment district that was established on February 2, 2009. Originally the district encompassed ten (10) parcels of land and was established to facilitate the purchase and redevelopment at the northwest corner of Excelsior Boulevard and France Avenue (former Al’s Liquors, Anderson Cleaners and motel sites). The first phase consists of the redevelopment of the Al’s Bar and Anderson Cleaner’s site into a five-story mixed use building consisting of 132 market rate apartments and 16,394 square feet of retail. The EDA is required to issue the Developer two TIF notes totaling up to $1,430,000, at an interest rate of 6%, to reimburse them for qualified redevelopment costs. The City purchased the motel site in 2009 and demolished the building in 2010. On February 6, 2012, the City entered into a development agreement with Ellipse II, LLC. to construct the second phase of the development, which consists of 58 market rate rental units. On August 20, 2012, the EDA entered into an amended and restated purchase and redevelopment agreement to allocate a portion of the property from Phase I to Phase II. The project was completed in early 2013. The EDA issued the Developer a pay-as-you-go TIF note for $686,195, at an interest rate of 5.6%, to reimburse them for qualified redevelopment costs (reduced from $700,000 after completion of the look back). Adopted……………..………. 02/02/2009 Requested Date………….….06/30/2009 Certified Date………..…..…..07/09/2009 First Increment………..…....…. 07/2011 Decertifies………………… 12/31/2036 Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 84 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 84 ELLIPSE ON EXCELSIOR CONTINUED Former and Current PID Numbers: Former PIDFormer UseNew PIDNew Use06-028-24-41-0002Al's Liquor06-028-24-41-0069Al's Liquor06-028-24-41-0053 Excelsior Blvd LLC06-028-24-41-0052Al's Liquor06-028-24-41-0056Al's Liquor06-028-24-41-0057Al's Liquor06-028-24-41-0051Al's Liquor06-028-24-41-0050Al's Liquor06-028-24-41-0058Al's Liquor06-028-24-41-0003 Budget Motel 06-028-24-41-0076 E2 Apartments06-028-24-41-0075 Ellipse Apartments Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 107.8190% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 85 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 85 ELLIPSE ON EXCELSIOR CONTINUED Obligations: There are three PAYGO Notes that were issued for this project as follows:  $1,230,000 PAYGO Note A – Redevelopment Costs issued on February 23, 2011, payable through 2/1/2025.  $220,000 PAYGO Note B – Environmental Costs issued on February 23, 2011, payable through 2/1/2025.  $686,195 PAYGO Note for E2– Redevelopment Costs issued on August 1, 2015, payable through 2/1/2023. The first two (2) Notes carry a 6% interest rate and the third one has a 5.6% interest rate. Each is paid from 95% of the available increment generated by the Ellipse on Excelsior Apartments (first 2 Notes) and Ellipse 2 (e2) on the second Note. The available increment is prorated semi-annually between the first two Notes with 86% being paid to the A Note and 14% being paid to the B Note. Notes A and B were paid off on August 1, 2018. The E2 Note was repaid in full August 1, 2020. Other Development Agreement Compliance: 1. Look Back – Ellipse I. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 20% internal rate of return, then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The development reached its occupancy threshold in mid-2011 and the look back was completed. The developer ‘s expected internal rate of return was below the 20% threshold so there was no excess profit to prepay the TIF note. 2. Look Back – Ellipse II. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 86 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 86 ELLIPSE ON EXCELSIOR CONTINUED actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds a 18% internal rate of return, then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The lookback was completed in May 2015 and the TIF Note was reduced by $13,805 to 686,195. 3. Special Service District – Both Properties. Upon written request by the City, they will submit required petition to renew any levy of special service charges for the District. 4. Minimum Assessment Agreement – Both Properties. For Phase I, the minimum market value as of January 2, 2011 shall be $8,819,000 and the minimum market value as of January 2, 2012 shall be $17,637,450. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. For Phase II, the minimum market value as of January 2, 2014 shall be $6,380,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Ellipse on Excelsior district does not fit this timeline and its four-year rule is July 2013. Since redevelopment has been completed on the former Al’s Bar and Anderson Drycleaner site (construction of the Ellipse Apartments) and the City has purchased and demolished the motel on the other site, the four-year rule has been met. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 87 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 87 ELLIPSE ON EXCELSIOR CONTINUED districts certified after June 30, 2003 and before April 20, 2009. The Ellipse on Excelsior district does not fit this timeline and its five-year rule is July 2014. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2014. Recommendations: 1. 6-Year Rule. Since TIF Note A and B were paid off on 8/1/2018. We completed the analysis for the 6-year rule analysis to determine if the District met the restrictions for in district increment use. The analysis was projected to 2019 since the obligations were paid. If future increment is intended to be used for affordable housing, as described below, we would recommend extending the analysis to the statutory duration of the District. 2. Use of TIF For Redevelopment. The E2 TIF Note for this District was paid off on August 1, 2020. Legal pooling of $178,589 was used in 2020 for the fiber optic cable project and an additional $170,000 was used for The Quentin, a multi family housing development along Cedar Lake Road. Currently there is a cash balance of $812,502 in the District. At year-end 2020, a total of $455,456 should be returned to the County for redistribution. This allows the remaining balance to be used for affordable housing. 3. Return of Increment For Redistribution on an Annual Basis. The EDA modified the budget in 2020 to allow for an additional 10% pooling for affordable housing. Since the in-district obligations are paid in full the EDA will need to annually monitor, calculate and return any increment in excess of the 35% (approximately $222,944) it is retaining for affordable housing purposes in the District (can retain up to 45% if additional 10% for admin is documented and spent on tax credit eligible projects). The City intends to utilize its proportionate share of the 65% of increment that is returned for redistribution to pay Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 88 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 88 for capital replacement projects within the General Fund in accordance with its long-range financial management plan (2021 estimated to total $183,312). Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 89 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 89 ELLIPSE ON EXCELSIOR CONTINUED City of St. Louis ParkEllipse on ExcelsiorORIGINALInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 2.3%At or Under LimitFiscal DisparitiesB ElectionCounty Number1315Frozen RateUTA #1 107.819%UTA #2 0.000%UTA #3 0.000%Current Year 2019First Receipt City Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income TOTAL REVENUES Project Interfund Loan Admin Expense County AdminAffordable Housing Outside District Other Expense TOTAL EXPENSEOriginal Budget2011 2/2/2009 6/30/2009 7/9/2009 12/31/2036 12/31/2036‐                          ‐                          ‐                          Cumulative Modified12/2/201911,058,500            11,058,500            4,530,300               1,652,670         1,105,830               3,769,700              11,058,500             11,058,500            End of District Projected Actual Total15,356,368             177,613                 9,808,615              176,599                  1,592,574         289,207          793,060              51,917              423,075                  29,856                     ‐                           363,669                  7,742,719              7,640,638               11,462,677            Under / (Over) Budget(4,297,868)              (177,613)                1,249,885              4,353,701               60,096              (289,207)         (793,060)             (51,917)             682,755                  (29,856)                   3,769,700               (363,669)                 (7,742,719)             3,417,862               (404,177)                (245,245)                Year Base CurrentFiscal DisparitiesCaptured Tax Increment Interest Income TOTAL REVENUESProject Ellipse Note A Ellipse Note B Ellipse E2 Interfund LoanAdmin Expense County AdminAffordable HousingOutside DistrictIncrement ReturnedTOTAL EXPENSE7 2017 24,527                     584,015                  23,927             535,561             124.745% 575,358                  178                         575,536                 ‐                           279,016            45,421             138,468              8,096                 7,426                       1,280                       ‐                           ‐                          479,708                  163,084                 8 2018 24,527                     595,890                  25,128             546,235             130.191% 586,830                  47                           586,877                 ‐                           360,134            88,578            153,267             8,501                5,674                      1,273                      ‐                          617,427                 132,534                 9 201924,527                    669,515                 24,527            620,461            125.012% 666,760                 8,705                      675,465                 ‐                          ‐                    ‐                   157,300             ‐                    9,520                      1,333                      15,080                    ‐                          183,233                 624,766                 10 202024,527                    703,860                 27,101            652,232            121.682% 700,701                 3,124                      703,825                 ‐                          ‐                    163,145             ‐                    21,021                    1,280                      348,589                 455,456                 989,491                 339,100                 11 202124,527                    703,860                 27,101            652,232            121.682% 700,698                 1,696                      702,394                 ‐                          ‐                      ‐                    21,021                    1,280                      455,454                 477,755                 563,739                 12 202224,527                    703,860                 27,101            652,232            121.682% 700,698                 2,819                      703,517                 ‐                          ‐                      ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 789,501                 13 202324,527                    703,860                 27,101            652,232            121.682% 700,698                 3,948                      704,646                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 1,016,392              14 202424,527                    703,860                 27,101            652,232            121.682% 700,698                 5,082                      705,780                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 1,244,418              15 202524,527                    703,860                 27,101            652,232            121.682% 700,698                 6,222                      706,920                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 1,473,583              16 202624,527                    703,860                 27,101            652,232            121.682% 700,698                 7,368                      708,066                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 1,703,895              17 202724,527                    703,860                 27,101            652,232            121.682% 700,698                 8,519                      709,218                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 1,935,358              18 202824,527                    703,860                 27,101            652,232            121.682% 700,698                 9,677                      710,375                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 2,167,978              19 202924,527                    703,860                 27,101            652,232            121.682% 700,698                 10,840                    711,538                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 2,401,761              20 203024,527                    703,860                 27,101            652,232            121.682% 700,698                 12,009                    712,707                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 2,636,714              21 203124,527                    703,860                 27,101            652,232            121.682% 700,698                 13,184                    713,882                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 2,872,841              22 203224,527                    703,860                 27,101            652,232            121.682% 700,698                 14,364                    715,063                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 3,110,148              23 203324,527                    703,860                 27,101            652,232            121.682% 700,698                 15,551                    716,249                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 3,348,642              24 203424,527                    703,860                 27,101            652,232            121.682% 700,698                 16,743                    717,442                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 3,588,329              25 203524,527                    703,860                 27,101            652,232            121.682% 700,698                 17,942                    718,640                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 3,829,214              26 203624,527                    703,860                 27,101            652,232            121.682% 700,698                 19,146                    719,844                 ‐                          ‐                    21,021                    1,280                      ‐                          455,454                 477,755                 4,071,304              ExpendituresTotal Budget DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSPaygoTIF PLAN BUDGET ANALYSISTIF YearTAX CAPACITYCurrent Local   Tax RateRevenuesExpendituresEnding BalanceDecertifies RevenuesCASH FLOW PROJECTIONS ROLL UPIDID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 90 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 90 HARDCOAT Description: Hardcoat (County #1316) is an economic development district that was established on December 20, 2010. Originally the district encompassed two (2) parcels of land and was established to facilitate the redevelopment of the former Flame Metals building. The City provided them a $500,000 grant through the Construction Assistance Program (CAP). Hardcoat renovated the building and site and relocated its operations there. The existing industrial building is approximately 33,600 square feet and was constructed in 1963. Both the interior and exterior had numerous building code deficiencies. Following Flame Metals’ departure in 2009, the building’s interior was emptied, thoroughly cleaned, repainted, and code deficiencies were addressed. Nearly all the building’s operating systems were removed. The project included a complete renovation of both the interior and exterior of the building as well as the addition of approximately 1,500 square feet of office/conference space on the north side of the building. Renovations included a new roof, new exterior facelift, new windows and dock doors, new offices and interior spaces, new electrical and plumbing systems, new energy efficient HVAC equipment, new parking lot and landscaping, rain gardens and site amenities, as well as the construction of a 1,500 SF addition for office/conference space. Hardcoat occupies approximately 25,000 square feet of the building. Adopted……………..….… 12/20/2010 Requested Date………..… 04/20/2011 Certified Date……………. . 04/27/2011 First Increment………………… 7/2014 Decertifies……………….... 12/31/2022 Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 91 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 91 HARDCOAT CONTINUED Former and Current PID Numbers: Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 121.8240% Obligations: There is one interfund loan as follows:  $500,000 Interfund Loan payable from the Hardcoat TIF district adopted on EDA Res10-24 on January 26, 2011. This Loan carries a 4% interest rate and is paid from 100% of the available increment generated by Hardcoat. The loan was structured so that $420,000 was authorized for construction costs and the remaining $80,000 was authorized for administrative costs. The actual amount that was loaned from Victoria Ponds was $115,000 for construction and $32,575 was loaned from the EDA for administrative costs. The EDA loan was repaid and a total of $56,943 was outstanding at year end 2019. It is anticipated that this loan will be repaid in full by year end 2022. Other Development Agreement Compliance: 1. Minimum Assessment Agreement. The minimum market value as of January 2, 2013 shall be $2,400,000. The Assessment Agreement shall be in place until the Interfund Loan is paid in full or the TIF District terminates, whichever is sooner. Former PIDFormer UseNew PIDNew Use20-117-21-21-0093 Flame Metals Same as Original17-117-21-34-0027 Flame Metals Same as OriginalHardcoatStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 92 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 92 HARDCOAT CONTINUED Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Hardcoat District does not fit this timeline and its four-year rule is April 2015. Since qualifying redevelopment activities happened prior to this date, the four-year rule has been satisfied. Five Year Rule: At least 80% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Hardcoat District does not fit this timeline and its five-year rule is 2016. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after 2016. Recommendations: 1. Payment of Administrative Costs. The District is currently over the admin limit. We would recommend that no further admin be charged to this District. The admin limit should fall into line with statutory limits by the expected duration. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 93 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 93 HARDCOAT CONTINUED City of St. Louis ParkHardcoatORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeEconomic Development Admin Expense 0.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: 14.5%Over LimitFiscal DisparitiesB ElectionCounty Number1316Frozen RateUTA #1 121.824% 0.000% 0.000%UTA #2 0.000%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income TOTAL REVENUESProject Paygo Interfund LoanAdmin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget2014 12/20/2010 4/20/2011 4/27/2011 12/31/2022 12/31/2022‐                          ‐                          ‐                          Cumulative Modified326,186                 50,000                    376,186                 317,861                 20,706                    37,619                    376,186                 376,186                 End of District Projected Actual Total210,959                 1,534                      212,493                 115,000                 ‐                          18,754                    1,641                      ‐                          ‐                          163,935                 135,395                 Under / (Over) Budget115,227                 48,466                    163,693                 202,861                 20,706                    18,865                    (1,641)                     ‐                          ‐                          212,251                 240,791                 YearBaseCurrent Fiscal Disparities CapturedTax Increment Interest Income TOTAL REVENUESProjectPaygo Interfund LoanAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE4 201722,194                    47,250                    8,169                      16,887                    124.745%20,498                    54                           20,552                   ‐                          4,600                    7                              556                         ‐                          ‐                          5,163                      (72,788)                  5 201822,194                    51,564                    10,056                    19,314                    130.191%23,444                    513                         23,957                   ‐                          3,992                    ‐                          ‐                          3,992                      (52,823)                  6 201922,194                    51,564                    9,744                      19,626                    125.012%23,823                    894                         24,717                   ‐                          3,152                    25                           ‐                          ‐                          3,177                      (31,282)                  7 202022,194                    56,590                    11,422                    22,974                    121.682%27,854                    27,854                   ‐                          2,278                    ‐                          ‐                          2,278                      (5,706)                    8 202122,194                    56,590                    11,422                    22,974                    121.682%27,855                    27,855                   ‐                          1,255                    ‐                          ‐                          1,255                      20,894                   9 202222,194                    56,590                    11,422                    22,974                    121.682%27,855                    27,855                   ‐                          191                       ‐                          ‐                          191                         48,558                   210,959                 1,534                      212,493                 115,000                 ‐                          28,540                 18,754                    1,641                      ‐                          ‐                          163,935                  DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 94 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 94 ELIOT PARK Description: Eliot Park (County #1318/1319) is redevelopment district that was established on July 16, 2013. Originally the district encompassed two (2) parcels of land and was established to facilitate the redevelopment of the former Eliot School building into 138 market rate apartments and two (2) single-family homes. The EDA is required to issue the Developer a $1,100,000 PAYGO TIF Note at 5.5% interest, to reimburse them for qualified redevelopment costs. On July 1, 2014, the EDA entered into a development Agreement with Cedar Lake Road Apartments LLC. The project began construction in 2014 and opened as the Siena Apartment Homes in July 2015. Subsequently two single family homes were constructed on the property as required under the extended redevelopment contract. Adopted……………..…..…. 05/06/2013 Requested Date…………….06/28/2013 Certified Date………..….…. 07/16/2013 First Increment………..…..……07/2016 Decertifies………………….. 12/31/2041 Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 95 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 95 ELLIOT PARK CONTINUED Former and Current PID Numbers: Property Address Former PID # Former Use New PID #'s New Use6720 Cedar Lake Road 08-117-21-11-0079Vacant lot 08-117-21-11-0094 Vacant08-117-21-12-0149Siena Apartment Homes08-117-21-12-0150Single Family Lot08-117-21-12-0151Single Family Lot6800 Cedar Lake Road 08-117-21-12-0028Eliot School Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 1318 – 132.209% 1319 - 133.134% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Obligations: There is currently one PAYGO Note in this district as follows:  $1,100,000 at 5.50% interest. The note was issued on July 25, 2016, payable from August 1, 2016 through February 1, 2021. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 96 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 96 ELLIOT PARK CONTINUED Other Development Agreement Compliance: 1. Look Back. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The lookback was completed in July 2016 and the IRR was only 14.18%. Therefore, there was no reduction in the amount of the TIF note. 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2016, shall be $17,250,000 for the apartments and $250,000 for each single-family home. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Eliot Park district does not fit this timeline and its four-year rule was July 2017. Since redevelopment has been completed, the four-year rule has been met. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Eliot Park district does not fit this timeline and its five-year rule was July 2018. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 97 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 97 ELLIOT PARK CONTINUED Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 2014. Recommendations: 1. Use of TIF For Redevelopment. The TIF Note for this District was paid off on August 1, 2020. Legal pooling of $330,000 was used in 2020 for the Cedar Lake Road project. Currently there is approximately cash balance $30,492 in the District for use on redevelopment projects, which represents the actual cash balance at December 21, 2020. 2. Return of Increment For Redistribution on an Annual Basis. The EDA modified the budget in 2020 to allow for an additional 10% pooling for affordable housing. Since the in-district obligations are paid in full the EDA will need to annually monitor, calculate and return any increment in excess of the 35% (approximately $149,751) it is retaining for affordable housing purposes in the District (can retain up to 45% if additional 10% for admin is documented and spent on tax credit eligible projects). The City intends to utilize its proportionate share of the 65% of increment that is returned for redistribution to pay for capital replacement projects within the General Fund in accordance with its long-range financial management plan. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 98 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 98 ELLIOT PARK CONTINUED City of St. Louis ParkElliot ParkORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 4.4%At or Under LimitFiscal DisparitiesB ElectionCounty Number1318, 1319Frozen RateUTA #1 132.209% 0.000% 0.000%UTA #2 133.134%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest IncomeRTOTAL REVENUESProject Interest Expense Interfund LoanAdmin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget2015 5/6/2013 6/28/2013 7/16/2013 12/31/2041 12/31/2041‐                          ‐                          ‐                          Cumulative Modified9,825,365               982,537                 10,807,902            5,404,624               4,420,741               982,537                 10,807,902             10,807,902            End of District Projected Actual Total471,422                  2,239                      3,098,124              ‐                           ‐                           ‐                         14,143                     1,085                       ‐                           306,424                 2,650,385               321,652                 Under / (Over) Budget9,353,943              980,298                 7,709,778              5,404,624              4,420,741              ‐                        968,394                 (1,085)                     ‐                          (306,424)                8,157,517              10,486,250            YearBaseCurrent Fiscal Disparities CapturedTax Increment Interest IncomeRTOTAL REVENUESProject Paygo Interfund LoanAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE0 20150.000%‐                          539                        17,819                     1,041                       ‐                           ‐                          19,399                    (19,399)                  1 2016 ‐                           52,201                     ‐                           52,201                     128.561% 65,244                    65,244                   30,424                     734                        10,093                     616                          ‐                           ‐                          41,867                    3,978                      2 2017 26,433                     303,473                  ‐                           277,040                  124.745% 343,232                  58                           343,290                 ‐                           195,168                  734                        4,714                       982                          ‐                           ‐                          201,598                  145,670                 3 2018 26,433                     372,164                  ‐                           345,731                  130.191% 445,675                  617                         446,292                 ‐                           350,721                  734                        5,323                       1,104                       ‐                           ‐                          357,882                  234,080                 4 2019 26,433                     391,004                  ‐                           364,571                  125.012% 351,696                  2,362                      354,058                 ‐                           309,043                  ‐                         6,086                       1,085                       ‐                           ‐                          316,214                  271,924                 5 2020 26,433                     417,329                  ‐                           390,896                 121.682%471,422                 1,360                      472,782                 ‐                          403,242                 ‐                        14,143                    1,085                      330,000                 ‐                          748,469                 (3,764)                    6 202126,433                    417,329                 ‐                          390,896                 121.682%471,422                 (19)                          471,403                 ‐                          ‐                          14,143                    1,085                      306,424                 321,652                 145,987                 7 202226,433                    417,329                 ‐                          390,896                 121.682%471,422                 730                         472,152                 ‐                          14,143                    1,085                      306,424                 321,652                 296,487                 8 202326,433                    417,329                 ‐                          390,896                 121.682%471,422                 1,482                      472,904                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 447,740                 9 202426,433                    417,329                 ‐                          390,896                 121.682%471,422                 2,239                      473,660                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 599,748                 10 202526,433                    417,329                 ‐                          390,896                 121.682%471,422                 2,999                      474,420                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 752,517                 11 202626,433                    417,329                 ‐                          390,896                 121.682%471,422                 3,763                      475,184                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 906,050                 12 202726,433                    417,329                 ‐                          390,896                 121.682%471,422                 4,530                      475,952                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 1,060,350              13 202826,433                    417,329                 ‐                          390,896                 121.682%471,422                 5,302                      476,724                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 1,215,422              14 202926,433                    417,329                 ‐                          390,896                 121.682%471,422                 6,077                      477,499                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 1,371,269              15 203026,433                    417,329                 ‐                          390,896                 121.682%471,422                 6,856                      478,278                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 1,527,895              16 203126,433                    417,329                 ‐                          390,896                 121.682%471,422                 7,639                      479,061                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 1,685,304              17 203226,433                    417,329                 ‐                          390,896                 121.682%471,422                 8,427                      479,848                 ‐                          14,143                    1,085                      ‐                          306,424                 321,652                 1,843,501               DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetIDStudy session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 99 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 99 THE SHOREHAM Description: The Shoreham (County #1320) is a redevelopment district that was adopted on August 17, 2015. The district encompasses five (5) parcels of land and was established to facilitate the redevelopment of the properties into 148 apartments and 20,000 sq/ft of retail/office. The Redeveloper agreed to reserve 20% of the apartment units for households earning 50% of Area Median Income (AMI) for at least 15 years following building occupancy. For the next 10 years, Redeveloper agreed to reserve at least 10% of the apartment units for households earning 60% of AMI or at least 8% of the apartment units for households earning 50% of AMI. The EDA is required to issue the Developer a $1,200,000 PAYGO TIF Note at 3.75% interest, to reimburse them for qualified redevelopment costs. On August 17, 2015, the EDA approved a development Agreement with Shoreham Apartments LLC. The project was awarded grants from the following agencies and in the following amounts: DEED: $625,075 Hennepin County: $430,000 Hennepin County: $200,000 Met Council: $594,000 On November 16, 2015 the EDA entered into a first amendment to the contract to clarify the amounts and purposes of the County Grants. The project began construction in late 2015. In 2019 the required lookback was completed, and it was determined that no reduction in principal amount of the TIF Note was warranted. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 100 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 100 THE SHOREHAM CONTINUED Adopted……………..…….…...8/17/2015 Requested Date……………..11/16/2015 Certified Date………..……… 4/18/2016 First Increment………..….....…..07/2018 Decertifies……………..……12/31/2043 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use3915 Hwy 706-028-24-11-0007Commercial3907 Hwy 706-028-24-11-0056Commercial3031 Glenhurst Ave06-028-24-11-0016Single-Family Rental3918 31st St W06-028-24-11-0015Single-Family Rental3914 31st St W06-028-24-11-0014Single-Family 06-028-24-11-0111Mixed Use (Apartment over Office) Fiscal Disparities Election: The City elected to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 128.260% Allowable Uses: MN Statute 469.176 sub 4j specifies the activities on which tax increment from a redevelopment district may be spent. In general, tax increment must be spent on correcting those conditions which caused the area to be designated a redevelopment district. Allowable uses include property acquisition, demolition, rehabilitation, installation of public utilities, road, sidewalks, public parking facilities, and allowable administrative expenses. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 101 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 101 THE SHOREHAM CONTINUED Obligations: There is currently one PAYGO Note in this district as follows:  $1,200,000 at 3.75% interest. The Note was issued on May 14, 2019, payable from August 1, 2020 through February 1, 2024. Other Development Agreement Compliance: 1. Look Back. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. This was completed in 2019 and the threshold was not met, therefore no reduction in assistance is warranted. 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2017 shall be $27,421,000 and $32,260,000 as of January 2, 2018. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Inclusionary Housing. The Redeveloper agrees to reserve at least 20% of the units for household earning 50% of the Area Median Income (AMI) for at least 15 years following building occupancy. For the next 10 years, the Redeveloper agrees to reserve at least 10% of the apartments for households earning 60% of the AMI or at least 8% of the units for households earning 50% of the AMI. The monthly rental price shall include rent and utility costs as determined annually by MHFA for the Housing Tax Credit Program. The size and design of these units shall be consistent and comparable with the market rate units and is subject to approval of the City. The units shall be distributed throughout the entire project. The units shall have a number of bedrooms in the approximate proportions of the market rate units. The Redeveloper agrees to prepare an affordable housing plan as required in the City’s Inclusionary Housing Policy. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 102 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 102 THE SHOREHAM CONTINUED Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The Shoreham district does not fit this timeline and its four-year rule was April 18, 2020. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The Shoreham district does not fit this timeline and its five-year rule is April 18, 2021. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after April 18, 2021. Recommendations: 1. Inclusionary Housing. The Redeveloper agreed to reserve at least 18 of the units for household earning 60% of the Area Median Income for at least 25 years following building occupancy. Since the Certificate of Occupancy has been provided, we recommend that staff reach out to the Developer and let them know that they need to provide the City the necessary compliance information. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 103 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 103 THE SHOREHAM CONTINUED 2. Use of Future TIF After Obligation is Repaid. The TIF Note for this District will be paid off on February 1, 2021. Currently there is approximately cash balance $265,550 in the District for use on redevelopment projects, which represents the actual cash balance at December 21, 2020 after the estimated final paygo payment is made on February 1, 2021. We recommend that the City/EDA modify the budget of the District in 2021 to allow for an additional 10% pooling for affordable housing. This would allow approximately $4.M to be used for affordable housing. Further, we would recommend a 6 Year Rule analysis be completed for the District if the budget is modified to allow for additional affordable housing. The City should ensure compliance with the restrictions for In District use. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 104 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 104 THE SHOREHAM CONTINUED City of St. Louis ParkShorehamORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: 5.8%At or Under LimitFiscal DisparitiesB ElectionCounty Number1320Frozen RateUTA #1 128.260%0.000%0.000%UTA #20.000%UTA #30.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income TOTAL REVENUESProjectPaygo Interfund LoanAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSEOriginal Budget2017 8/17/2015 8/17/2015 4/18/2016 12/31/2043 12/31/2043‐                          ‐                          ‐                          Cumulative Modified12,293,160             1,229,316              13,522,476            8,150,030               4,757,788               614,658                 13,522,476             13,522,476            End of District Projected Actual Total13,924,525             268,210                 5,885,467              ‐                           1,229,766               2,305                     401,386                  27,254                   ‐                            8,058,969              4,220,508               9,719,681              Under / (Over) Budget(1,631,365)             961,106                 7,637,009              8,150,030              3,528,022              (2,305)                  213,272                 (27,254)                ‐                            (8,058,969)             9,301,968              3,802,795              YearBaseCurrent Fiscal Disparities CapturedTax Increment Interest Income TOTAL REVENUESProjectPaygo Interfund LoanAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE201641,112                    499,230                 13,509                    444,609                 128.561%‐                          ‐                          582                       3,121                      ‐                           ‐                          3,703                      (18,242)                  201741,112                    29,800                    ‐                          ‐                          124.745%‐                          ‐                          ‐                          706                       514                         527                       ‐                           ‐                          1,747                      (19,989)                  1 201841,112                    342,765                 ‐                          301,653                 130.191% 386,056                 2,262                      388,318                 ‐                          ‐                          748                       4,366                      1,019                    ‐                           ‐                          6,133                      362,196                 2 201941,112                    536,400                 12,806                    482,482                 125.012% 600,991                 7,488                      608,479                 ‐                          620,441                 269                       5,261                      1,252                    ‐                           ‐                          627,223                 343,452                 3 202041,112                    499,230                 13,509                    444,609                 121.682% 539,064                 1,717                      540,781                 ‐                          482,380                 0                           16,172                    1,019                    ‐                           ‐                          499,571                 384,662                 4 202141,112                    499,230                 13,509                    444,609                 121.682% 539,061                 1,923                      540,985                 ‐                          126,945                 16,172                    1,019                    ‐                           350,390                 494,526                 431,121                 5 202241,112                    499,230                 13,509                    444,609                 121.682% 539,061                 2,156                      541,217                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 604,757                 6 202341,112                    499,230                 13,509                    444,609                 121.682% 539,061                 3,024                      542,085                 ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 779,262                 7202441,112                    499,230                 13,509                    444,609                 121.682% 539,061                 3,896                      542,958                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 954,639                 8 202541,112                    499,230                 13,509                    444,609                 121.682% 539,061                 4,773                      543,835                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 1,130,893              9 202641,112                    499,230                 13,509                    444,609                 121.682% 539,061                 5,654                      544,716                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 1,308,028              10 202741,112                    499,230                 13,509                    444,609                 121.682% 539,061                 6,540                      545,602                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 1,486,049              11 202841,112                    499,230                 13,509                    444,609                 121.682% 539,061                 7,430                      546,492                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 1,664,959              12 202941,112                    499,230                 13,509                    444,609                 121.682% 539,061                 8,325                      547,386                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 1,844,765              13 203041,112                    499,230                 13,509                    444,609                 121.682% 539,061                 9,224                      548,285                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 2,025,469              14 203141,112                    499,230                 13,509                    444,609                 121.682% 539,061                 10,127                    549,189                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 2,207,077              15 203241,112                    499,230                 13,509                    444,609                 121.682% 539,061                 11,035                    550,097                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 2,389,594              16 203341,112                    499,230                 13,509                    444,609                 121.682% 539,061                 11,948                    551,009                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 2,573,022              17 203441,112                    499,230                 13,509                    444,609                 121.682% 539,061                 12,865                    551,927                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 2,757,368              18 203541,112                    499,230                 13,509                    444,609                 121.682% 539,061                 13,787                    552,848                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 2,942,635              19 203641,112                    499,230                 13,509                    444,609                 121.682% 539,061                 14,713                    553,775                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 3,128,829              20 203741,112                    499,230                 13,509                    444,609                 121.682% 539,061                 15,644                    554,706                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 3,315,954              21 203841,112                    499,230                 13,509                    444,609                 121.682% 539,061                 16,580                    555,641                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 3,504,015              22 203941,112                    499,230                 13,509                    444,609                 121.682% 539,061                 17,520                    556,582                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 3,693,015              23 204041,112                    499,230                 13,509                    444,609                 121.682% 539,061                 18,465                    557,527                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 3,882,961              24 204141,112                    499,230                 13,509                    444,609                 121.682% 539,061                 19,415                    558,476                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 4,073,857                                        25 204241,112                    499,230                 13,509                    444,609                 121.682% 539,061                 20,369                    559,431                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 4,265,707              26 204341,112                    499,230                 13,509                    444,609                 121.682% 539,061                 21,329                    560,390                 ‐                          ‐                          16,172                    1,019                    ‐                           350,390                 367,581                 4,458,516               DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPTIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal BudgetID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 105 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 105 4900 EXCELSIOR Description: 4900 Excelsior (County #1321) is a redevelopment district that was adopted on November 16, 2015. The district encompasses two (2) parcels of land (former Bally’s Fitness Center and EDA vacant parcel) and established to facilitate the redevelopment of the properties into 164 apartments and a 28,000 sq/ft grocery store. On December 7, 2015, the EDA approved a development Agreement with 4900 Excelsior Apartments LLC. The Redeveloper agreed to reserve 18 of the residential units for households earning 60% of Area Median Income (AMI) for at least 25 years following building occupancy. The EDA is required to issue the Developer a $2,800,000 PAYGO TIF Note at 4.5% interest, to reimburse them for qualified redevelopment costs. In early March, the lookback was completed for the project and it was determined that no reduction in assistance was warranted. Therefore, on March 5, 2019 the TIF Note was issued and 4900 Excelsior Boulevard project was later renamed 4800 Excelsior. Adopted……………………. 11/16/2015 Requested Date………… 06/16/2016 Certified Date……………... 07/01/2016 First Increment…………….. 07/01/2019 Expected Decertification…..12/31/2024 Decertifies…………………. 12/31/2044 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use4900 Excelsior Blvd07-028-24-21-0002Bally's Fitness CenterTBD4760 Excelsior Blvd07-028-24-21-0258 Vacant LotTBDMixed-Use Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 106 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 106 4900 EXCELSIOR CONTINUED Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 128.561% Obligations: There is one PAYGO Note in this district as follows:  $2,600,000 at 4.50% interest. The Note was issued on March 5, 2019, payable from August 1, 2019 through February 1, 2027. Other Development Agreement Compliance: 1. Look Back. Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased); (2) sale of property or; (3) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual profit for the developer exceeds an 18% internal rate of return (IRR), then 50% of the excess percentage of the profit will be applied as prepayment of the outstanding principal amount of the TIF Note. The lookback was completed in 2019 and the threshold was not met. Therefore, it was determined that no reduction in the principal amount of the TIF Note was warranted. 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2018 shall be $31,680,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Public Art. The Redeveloper shall allocate at least $75,000 for the design and installation of public artwork to be placed in a prominent location on the property. Prior to installation, the design of the public art shall be approved by the EDA, provided that such approval shall not be unreasonably withheld. Installation shall be completed prior to issuance of a Certificate of Completion. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 107 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 107 4900 EXCELSIOR CONTINUED 4. Inclusionary Housing. The Redeveloper agrees to reserve at least 18 of the units for household earning 60% of the Area Median Income for at least 25 years following building occupancy. The monthly rental price shall include rent and utility costs as determined annually by MHFA for the Housing Tax Credit Program. The size and design of these units shall be consistent and comparable with the market rate units and is subject to approval of the City. The units shall be distributed throughout the entire project. The units shall have a number of bedrooms in the approximate proportions of the market rate units. The Redeveloper agrees to prepare an affordable housing plan as required in the City’s Inclusionary Housing Policy. 5. Property Management. The Redeveloper shall cause the project to be professionally managed by a management company with substantial experience in operating mixed-use developments. The selection of the property management company is subject to approval by the EDA, which approval shall not be unreasonably withheld. 6. Special Service District Maintenance. Upon the written request of the EDA, the Redeveloper agrees to file any petition or other document required to enter into the City’s Special Service District No. 3 and to become subject to special service charges levied on all commercial properties in the District. Prior to issuance of a Certificate of Completion, the Redeveloper shall submit to the EDA for review and approval a plan for maintenance and operation of all pedestrian and landscaping improvements located within the property, other than those within the Excelsior Boulevard right-of-way and/or included in the Special Service District. The plan must address at a minimum snow removal from pedestrian connections and sidewalks, maintenance and replacement of landscaping, irrigation and other streetscaping, snow removal and maintenance of any surface parking and maintenance of the public art, a description of how the maintenance costs will be assessed to tenants and enforcement mechanisms. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The State Legislature amended the four-year rule limit to increase it to six years for districts certified after January 1, 2005 and before April 20, 2009. The 4900 Excelsior district does not fit this timeline and its four-year rule was July 1, 2020. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 108 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 108 4900 EXCELSIOR CONTINUED Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The State Legislature amended the five-year rule limit to increase it to ten years for Redevelopment or Renewal and Renovation districts certified after June 30, 2003 and before April 20, 2009. The 4900 Excelsior district does not fit this timeline and its five-year rule is July 1, 2021. Since the EDA has entered into contracts and obligated TIF dollars, the Five-Year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 1, 2021. Recommendations: 1. Inclusionary Housing. The Redeveloper agreed to reserve at least 18 of the units for household earning 60% of the Area Median Income for at least 25 years following building occupancy. Since the Certificate of Occupancy has been provided, we recommend that staff reach out to the Developer and let them know that they need to provide the City the necessary compliance information. 2. Use of Future TIF After Obligation is Repaid. The TIF Note for this District is anticipated to be paid off on August 1, 2025. We recommend that the City/EDA modify the budget of the District to allow for an additional 10% pooling for affordable housing. This would allow approximately $4.3M to be used for affordable housing. Further, we would recommend a 6 Year Rule analysis be completed for the District if the budget is modified to allow for additional affordable housing. The City should ensure compliance with the restrictions for In District use. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 109 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 109 4900 EXCELSIOR CONTINUED City of St. Louis Park4900 ExcelsiorORIGINALHSS Geo. EnlargementInterest Income 0.50% 1)  Limited Pooling options availableDistrict TypeRedevelopment Admin Expense 3.00% 2)  Budget Mod:  Not Recommended at this timeProject Area3)  Admin. Expense is currently: for year 2019 6.9%At or Under LimitFiscal DisparitiesB ElectionCounty Number1321Frozen RateUTA #1 128.260% 0.000% 0.000%UTA #2 0.000%UTA #3 0.000%Current Year 2019First ReceiptCity Approved Cert Request Certified Legal Term Expected Term Tax Increment Interest Income TOTAL REVENUESProject Paygo Bonds Interfund LoanAdmin Expense County Admin Outside District Other Expense TOTAL EXPENSEOriginal Budget2019 11/16/2015 6/16/2016 7/1/2016 12/31/2044 12/31/2044‐                          ‐                          ‐                          Cumulative Modified21,611,861             2,161,139              23,773,000            12,508,567             9,103,337               2,161,096              23,773,000             23,773,000            End of District Projected Actual Total665,099                  14,474                    6,528,792              ‐                           ‐                           ‐                         19,953                     500                          ‐                           432,315                 4,751,183               452,768                 Under / (Over) Budget20,946,762             2,146,665              17,244,208            12,508,567             9,103,337               ‐                         2,141,143               (500)                         ‐                           (432,315)                19,021,817             23,320,232            Year Base Current Fiscal DisparitiesCaptured Tax Increment Interest Income TOTAL REVENUESProject Paygo Bonds Interfund LoanAdmin Expense County Admin Outside DistrictIncrement ReturnedTOTAL EXPENSE2018 47,330                     47,330                     ‐                           ‐                           124.745% ‐                          ‐                          ‐                           ‐                         723                        11,486                     538                          ‐                           ‐                          12,747                    (31,971)                  1 2019 47,330                     475,420                  23,005                     405,085                  125.012% 504,580                  2,389                      506,969                 ‐                           211,547                  ‐                         1,182                     5,574                       1,137                       ‐                           ‐                          219,440                  255,558                 2 2020 47,330                     618,920                  23,027                     548,563                  121.682% 665,098                  1,278                      666,376                 ‐                           491,826                  ‐                         19,953                     500                          ‐                           ‐                          512,278                  409,655                 3 2021 47,330                     618,920                  23,027                     548,563                  121.682% 665,099                  2,048                      667,148                 ‐                           560,556                  ‐                         19,953                     500                          ‐                           ‐                          581,009                  495,793                 4 2022 47,330                     618,920                  23,027                     548,563                  121.682% 665,099                  2,479                      667,578                 ‐                           560,556                  ‐                         19,953                     500                          ‐                           ‐                          581,009                  582,362                 5 2023 47,330                     618,920                  23,027                     548,563                  121.682% 665,099                  2,912                      668,011                 ‐                           560,556                  ‐                         19,953                     500                          ‐                           ‐                          581,009                  669,364                                           6 202447,330                    618,920                 23,027                    548,563                 121.682% 665,099                 3,347                      668,446                 ‐                          560,556                 ‐                        19,953                    500                         ‐                          581,009                 756,801                 7 202547,330                    618,920                 23,027                    548,563                 121.682% 665,099                 3,784                      668,883                 ‐                          284,700                 ‐                        19,953                    500                         ‐                          305,153                 1,120,532              8 202647,330                    618,920                 23,027                    548,563                 121.682% 665,099                 5,603                      670,702                 ‐                          ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 1,338,466              9 202747,330                    618,920                 23,027                    548,563                 121.682% 665,099                 6,692                      671,792                 ‐                          ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 1,557,490              10 202847,330                    618,920                 23,027                    548,563                 121.682% 665,099                 7,787                      672,887                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 1,777,609              11 202947,330                    618,920                 23,027                    548,563                 121.682% 665,099                 8,888                      673,987                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 1,998,829              12 203047,330                    618,920                 23,027                    548,563                 121.682% 665,099                 9,994                      675,094                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 2,221,155              13 203147,330                    618,920                 23,027                    548,563                 121.682% 665,099                 11,106                    676,205                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 2,444,593              14 203247,330                    618,920                 23,027                    548,563                 121.682% 665,099                 12,223                    677,322                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 2,669,148              15 203347,330                    618,920                 23,027                    548,563                 121.682% 665,099                 13,346                    678,445                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 2,894,825                                        16 203447,330                    618,920                 23,027                    548,563                 121.682% 665,099                 14,474                    679,574                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 3,121,631                                        17 203547,330                    618,920                 23,027                    548,563                 121.682% 665,099                 15,608                    680,708                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 3,349,571              18 203647,330                    618,920                 23,027                    548,563                 121.682% 665,099                 16,748                    681,847                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 3,578,651                                        19 203747,330                    618,920                 23,027                    548,563                 121.682% 665,099                 17,893                    682,993                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 3,808,876                                        20 203847,330                    618,920                 23,027                    548,563                 121.682% 665,099                 19,044                    684,144                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 4,040,252                                        21 203947,330                    618,920                 23,027                    548,563                 121.682% 665,099                 20,201                    685,301                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 4,272,785                                        22 204047,330                    618,920                 23,027                    548,563                 121.682% 665,099                 21,364                    686,463                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 4,506,481                                        23 204147,330                    618,920                 23,027                    548,563                 121.682% 665,099                 22,532                    687,632                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 4,741,345              24 204247,330                    618,920                 23,027                    548,563                 121.682% 665,099                 23,707                    688,806                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 4,977,384              25 204347,330                    618,920                 23,027                    548,563                 121.682% 665,099                 24,887                    689,986                 ‐                          ‐                        19,953                    500                         ‐                          432,315                 452,768                 5,214,602              26 204447,330                    618,920                 23,027                    548,563                 121.682% 665,099                 26,073                    691,172                 ‐                          ‐                        19,953                    ‐                          432,315                 452,268                 5,453,507              TIF PLAN BUDGET ANALYSISDecertifiesRevenuesExpendituresTotal Budget DISTRICT INFORMATIONASSUMPTIONSRECOMMENDATIONSTIF YearTAX CAPACITYCurrent Local      Tax RateRevenuesExpendituresEnding BalanceCASH FLOW PROJECTIONS ROLL UPID Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 110 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 110 WAYZATA BOULEVARD (PLATIA PLACE) Description: Wayzata Boulevard (County #1322) is a redevelopment district adopted on June 16, 2017. The district encompasses two (2) parcels of land (former Santorini’s restaurant site and related ROW owned by the EDA) and was established to facilitate the redevelopment of the properties into a 100-room hotel and 149-unit apartment building. On October 15, 2018, the EDA approved a revised Purchase and Redevelopment Agreement with SLP Park Ventures LLC. Under which the developer agreed to purchase the vacated ROW from the EDA and construct the two projects. The EDA is required to issue the Developer two pay-as-you-go TIF Notes (Hotel Note - $714,000 and Apartment Note - $2,760,000) at 5.5% interest, to reimburse them for qualified redevelopment costs. Given current market conditions, the proposed hotel and apartment building will not be proceeding. Therefore, the district is expected to be decertified. A new development requiring a housing district is anticipated in its place Adopted…………………….03/21/2016 Requested Date………… 06/16/2016 Certified Date………………07/01/2016 First Increment……………..08/01/2021 Decertifies………………….12/31/2046 Former and Current PID Numbers: Property Address Former PID # Former UseNew PID #'sNew Use9920 Wayzata Blvd01-117-22-14-0018Santorini TBD9808 Wayzata Blvd01-117-22-14-0002SantoriniTBDMixed-Use Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 111 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 111 WAYZATA BOULEVARD (PLATIA PLACE) CONTINUED Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 131.8230% Obligations: It is anticipated that there will be two (2) PAYGO Note in this district as follows:  $714,000 for the hotel. To date the Note has not been issued.  $2,760,000 for the apartments. To date the Note has not been issued. Other Development Agreement Compliance: 1. Look Back. There are three (3) components to the lookback. (1) At the time of completion of construction of each component, if the amount of the Public Redevelopment Costs actually incurred is less than anticipated, the TIF Note(s) will be reduced on a dollar for dollar basis. (2) Within 60 days after the earliest of (i) stabilization (93% of the rental units are leased or hotel is at 68% occupancy); (ii) sale of property or; (iii) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual cash-on-cash (COC) return to the developer(s) exceeds 10% for the apartments or 9% for the hotel, then the TIF Notes will be reduced by 50% of the amount that results in an annual COC return equal to 10% for the apartments and 9% for the hotel; and (3) At the time of sale of either of the projects during the first five (5) years after issuance of the CO, if the COC exceeds 10% for the apartments or 9% for the hotel, the amount that exceeds these thresholds will be used to reduce the principal amount of the TIF Note(s). Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 112 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 112 WAYZATA BOULEVARD (PLATIA PLACE) CONTINUED 2. Minimum Assessment Agreement. The minimum market value for the hotel as on January 2, 2021 shall be $8,500,000. The minimum market value for the apartments as of January 2, 2020 shall be $14,900,000 and $29,800,000 as of January 2, 2021. The Assessment Agreement shall be in place until the applicable TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Inclusionary Housing. The Redeveloper agrees to reserve at least 15 of the units for household earning 50% of the Area Median Income for at least 25 years following building occupancy. The size and design of these units shall be consistent and comparable with the market rate units and is subject to approval of the City. The units shall be distributed throughout the entire project. The units shall have a number of bedrooms in the approximate proportions of the market rate units. The Redeveloper agrees to prepare an affordable housing plan as required in the City’s Inclusionary Housing Policy. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The Wayzata Boulevard four-year rule was July 1, 2020. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The Wayzata Boulevard district five-year rule is July 1, 2021. If the EDA enters into a contract and obligated TIF dollars, the Five-Year rule will be satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 1, 2021. Recommendations: The district should be decertified. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 113 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 113 ELMWOOD APARTMENTS Description: Elmwood Apartments (County #1323) is a redevelopment district adopted on May 15, 2017. The district encompasses one (1) parcel of land (former 36th Street Business Center) and was established to facilitate the redevelopment of the property into a five-story, 70-unit apartment (with 17 affordable units) and 4,400 sq/ft of retail space. On September 18, 2017 the EDA entered into a revised contract for private redevelopment with 36th Street LLC and agreed to provide a pay-as-you-go note in the amount of $950,000. The Redeveloper agreed to reserve 24% of the residential units for households earning 60% of Area Median Income (AMI) for at least 25 years following building occupancy. Adopted……………………..05/15/2017 Requested Date……………06/27/2017 Certified Date………………06/30/2017 First Increment……………….7/1/2019 Decertifies………………….12/31/2044 Former and Current PID Numbers: Property AddresssForemer PID #Former Use New PID #New Use5605 36th Street West 16‐117‐21‐34‐0073 36th St Business Ctr Same as former PID Sr. Apartments over retail Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 114 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 114 ELMWOOD APARTMENTS CONTINUED Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 124.605% Obligations: It is anticipated there will be one PAYGO Note in this district as follows:  $950,000 at the lesser of 5% or the Redeveloper’s actual financing rate and paid with 95% of the TIF generated from the project. The Note has not yet been issued Other Development Agreement Compliance: 1. Look Back. At the time of completion of construction, if the aggregate total amount of the Public Redevelopment Costs paid or incurred by the Redeveloper is less than the aggregate total amount of Public Redevelopment Costs projected (in Schedule E of the Development Agreement), the total assistance provided will be reduced on a dollar-for-dollar basis and the principal amount of the TIF Note will be reduced accordingly. In addition, if the Projected Total Development costs, excluding Public Redevelopment Costs (in Schedule F of the Development Agreement), are less than the Projected Total Development Costs, the principal amount of the Note will be reduced by 50% of the excess of the Projected Total Development Costs over the actual Total Development Costs paid or incurred by the Redeveloper. 2. Minimum Assessment Agreement. The minimum market value as of January 2, 2019, shall be $8,100,000 and $16,200,000 as of January 2, 2020. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 115 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 115 ELMWOOD APARTMENTS CONTINUED 3. Designated Outdoor Recreation Area (DORA). The Redeveloper shall construct a DORA for the use and enjoyment of residents and invitees of the project and members of the general public. The DORA shall incorporate amenities to be mutually agreed upon by the Authority and Redeveloper, and which shall include public art and may include street furnishings or landscaping, and/or decorative lighting elements. The parties agree and understand that the Redeveloper shall be responsible for the cost of any maintenance and repair of the public art. If the Redeveloper fails to perform the Art Maintenance after thirty (30) days written notice from the Authority of the Redeveloper’s obligation to perform such maintenance (or such longer period of time as is reasonably necessary if the Maintenance cannot reasonably be completed within said thirty-day period), then the Authority or City may perform the Art Maintenance and forward evidence of the costs incurred in such Art Maintenance to the Redeveloper. The Redeveloper shall pay the Authority the costs of the Art Maintenance within sixty (60) days of receipt of such evidence. 4. Inclusionary Housing. The Redeveloper agrees to reserve at least 24% of the units for household earning 60% of the Area Median Income for at least 25 years following building occupancy. The monthly rental price shall include rent and utility costs as determined annually by MHFA for the Housing Tax Credit Program. The size and design of these units shall be consistent and comparable with the market rate units and is subject to approval of the City. The units shall be distributed throughout the entire project. The units shall have a number of bedrooms in the approximate proportions of the market rate units. The Redeveloper agrees to prepare an affordable housing plan as required in the City’s Inclusionary Housing Policy. 5. Management. The Redeveloper shall at all times engage a property management company with substantial experience in operating mixed-use developments, subject to approval by the Authority, which approval will not be unreasonably withheld. The Redeveloper will submit evidence of such management upon request by the Authority. The Redeveloper has notified the Authority of, and the Authority has approved, the engagement of Main Street Companies as property management company. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 116 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 116 ELMWOOD APARTMENTS CONTINUED 6. Special Service District Maintenance. The Redeveloper understands that the project currently lies within the City’s Special Service District No. 6 and is subject to existing special service charges. Upon written request of the Authority or City, the Redeveloper will file any petition required under Minnesota Statutes, Chapter 428A in order to renew any levy of special service charges within the Special Service District. The Redeveloper further waives all rights to veto, appeal or otherwise object to imposition of a service charge levied in accordance with this paragraph. By no later than December 31, 2018, the Redeveloper shall submit to the Authority for review and approval a plan for maintenance and operation of all pedestrian and landscaping improvements located within the project. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four-year rule will be June 30, 2021. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The five-year rule is June 30, 2022. Since the EDA has entered into a contract and obligated TIF dollars, the five-year rule has been satisfied. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 30, 2022. Recommendations: None at this time. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 117 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 117 WOODDALE STATION Description: Wooddale Station (County #1324) is a redevelopment district adopted on May 1, 2017. The district encompasses ten (10) parcels of land (former McGarvey Coffee and others) and was established to facilitate the redevelopment of the properties into 200 affordable apartments, 99 market rate apartments, 110-room hotel, 16,261 sq/ft commercial space and a 10,800 sq/ft Greenhouse/E-Generation facility. The development incorporates a mix of renewable energy sources, including an anaerobic digester, wind turbines and solar panels, which will provide 90% of the heat and power for the development. The entire development is designed to achieve LEED certification. The development also includes a mobility plan to lessen the traffic impact in the area, including car-free living, car share, bike share, multiple onsite live/work opportunities, transit passes and a local shuttle. On May 1, 2017 the EDA entered into a Purchase and Redevelopment contract with PLACE E-Generation One LLC and agreed to sell the redevelopment site and provide PLACE with a pay-as-you-go note in the total amount of $5,660,000. The 1st amendment was dated November 6, 2017. The 2nd amendment was dated December 18, 2017. The 3rd amendment was dated May 7, 2018, the 4th amendment was dated November 5, 2018 and the 5th amendment was dated June 17, 2019. Consideration of a 6th amendment is pending. To date, demolition and remediation of the North parcel has been completed but building construction has commenced. The south side of PLACE project did not proceed. The south side of the district is expected to be decertified within the next two years and a new multi-family redevelopment project is expected in a new TIF district. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 118 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 118 WOODALE STATION CONTINUED Adopted…………………….05/01/2017 Requested Date………… 06/28/2017 Certified Date………………06/30/2017 First Increment……………….est. 2021 Decertifies………………….12/31/2045 Former and Current PID Numbers: Property AddresssForemer PID #Former Use New PID #New Use5815 Hwy 716-117-21-31-0079Vacant Same as former PID5725 Hwy 716-117-21-31-0078Frmr industrial bldg Same as former PID3520 Yosemite16-117-21-31-0002Rail ROW Same as former PID5925 Hwy 716-117-21-31-0071Vacant Same as former PID5816 36th St W16-117-21-34-0041Parking lot Same as former PID5814 36th St W16-117-21-34-0042Parking lot Same as former PID3565 Wooddale 16-117-21-34-0069 Commerical bldg Same as former PID3548 Xenwood Ave 16-117-21-31-0076Rail ROW Same as former PIDN/AROWROW Same as former PID3575 Wooddale16-117-21-34-0024Parking lot Same as former PIDMixed Use Development Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 124.605% Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 119 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 119 WOODALE STATION CONTINUED Obligations: It is anticipated there will be one PAYGO Note in this district as follows:  $5,660,000 at the lesser of 5% or the Redeveloper’s actual financing rate and paid with 95% of the TIF generated from the project. The Note has not yet been issued and can be split into two (2) notes (North and South). Other Development Agreement Compliance: 1. Look Back. At the time of completion of construction of the Minimum Improvements, if the aggregate total amount of the Public Redevelopment Costs paid or incurred is less than the aggregate total amount of Public Redevelopment Costs, the total assistance provided will be reduced on a dollar-for-dollar basis and the principal amount of the TIF Note will be reduced accordingly. In addition, if the Projected Total Development costs, excluding Public Redevelopment Costs (in Schedule E of the Development Agreement), are less than the Projected Total Development Costs, the principal amount of the Note will be reduced by 50% of the excess of the Projected Total Development Costs over the actual Total Development Costs paid or incurred by the Redeveloper. 2. Minimum Assessment Agreement. As of January 2, 2019 the minimum market value for the North Side Apartments Components, shall be $18,100,000, the minimum market value for the North Commercial Space Component shall be $390,600, the minimum market value for the E-Generation Facility Component shall be $108,000, the minimum market value for the South Apartments Component shall be $6,903,750, the minimum market value for the South Commercial Space Component shall be $735,225, and the minimum market value for the Hotel Component shall be $4,675,000. As of January 2, 2020 and each January 2 thereafter, the minimum market value for the North Apartments Component shall be $36,200,000, the minimum market value for the North Commercial Space Component shall be $781,000, the minimum market value for the E-Generation Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 120 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 120 WOODALE STATION CONTINUED Facility Component shall be $216,000, the minimum market value for the South Apartments Component shall be $13,807,500, the minimum market value for the South Commercial Space Component shall be $1,470,450, and the minimum market value for the Hotel Component shall be $9,350,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. 3. Live/Work Units. The Redeveloper agrees to design 99 of the units of the North Apartments Component and South Apartments Component as live/work units (“Live/Work Units”), comprised of Live/Work Type I and Live/Work Type II units. Approximately 94 Live/Work Type I units will include a large working space within the dwelling unit, but no physical storefront, with approximately 18 Live/Work Type I Units will be located in the North Apartments Component and approximately 76 Live/Work Type I Units located in the South Apartments Component. There will be approximately five Live/Work Type II Units, which will include a large workspace within the dwelling unit and a storefront, with all Live/Work Type II Units located in the South Apartments Component. 4. Inclusionary Housing. The Redeveloper agrees to reserve 200 of the units for households earning between 50% and 80% of the Area Median Income for at least 25 years following building occupancy. The monthly rental price shall include rent and utility costs as determined annually by MHFA for the Housing Tax Credit Program. The size and design of these units shall be consistent and comparable with the market rate units and is subject to approval of the City. The units shall be distributed throughout the entire project. The units shall have a number of bedrooms in the approximate proportions the market rate units. The Redeveloper agrees to prepare an affordable housing plan as defined in the City’s Inclusionary Housing Policy. 5. Public Art. The Redeveloper agrees to incorporate public art curated by the Museum of Outdoor Arts (the “Public Art”) throughout the Redevelopment Property. The Public Art will include: (i) community-led art components involving collaboration with local artists, schools, and organizations; (ii) 8 to 10 art installations interwoven into the Urban Forest; (iii) additional pieces to be installed in the Plaza and other publicly accessible pedestrian areas on the Redevelopment Property, as well as affixed to various of the Components; and (iv) multipurpose spaces featuring exhibits and presentations from creatives as well as hosting community gatherings. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 121 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 121 WOODALE STATION CONTINUED 6. Special Service District Maintenance. The Redeveloper understands that the project currently lies within the City’s Special Service District No. 6 and is subject to existing special service charges. Upon written request of the EDA or City, the Redeveloper will file any petition required under Minnesota Statutes, Chapter 428A in order to renew any levy of special service charges within the Special Service District. 7. Property Management. The Redeveloper agrees to have the Minimum Improvements professionally managed by a property management company with substantial experience in operating mixed-use developments. The Redeveloper’s selection of the property management company is subject to approval by the Authority, which approval shall not be unreasonably withheld. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four-year rule will be June 30, 2021. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. The five-year rule is June 30, 2022. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after June 30, 2022. Recommendations: None at this time. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 122 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 122 BRIDGEWATER BANK Description: Bridgewater Bank (County #1325) is a redevelopment district adopted on July 16, 2018. The district encompasses three (3) parcels of land and was established to facilitate the redevelopment of the properties into the corporate headquarters of Bridgewater Bank (39,967 sq/ft), 19,775 sq/ft of additional office, 7,530 sq/ft of retail space and 7,152 sq/ft Bridgewater Bank facility. The project has been completed. On August 6, 2018 the EDA entered into a contract for Private Redevelopment with Bridgewater Bank and agreed to provide it with a pay-as-you-go note in the amount of $950,000. Adopted…………………….08/06/2018 Requested Date……………12/14/2018 Certified Date………………05/11/2019 First Increment……………….est. 2021 Decertifies………………….12/31/2045 Former and Current PID Numbers: Property AddresssForemer PID #Former Use New PID #New Use4424 Excelsior Blvd 06‐028‐24‐43‐0064Vacant Same as former PID4400 Excelsior Blvd 06‐028‐24‐43‐0187Vacant Same as former PID3743 Monterey Drive 06‐028‐24‐43‐0065Vacant Same as former PIDOffice/Retail BRIDGEWATER BANK CONTINUED Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 123 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 123 Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 125.012% Obligations: It is anticipated there will be one PAYGO Note in this district as follows:  $950,000 and paid with 95% of the TIF generated from the project. The Note has not yet been issued. Other Development Agreement Compliance: 1. Commencement and Completion of Construction. The Redeveloper shall commence construction by December 31, 2018 and be completed by December 31, 2020. 2. Green Building Policy. Developer shall development the project in accordance with the City’s policy and shall use commercially reasonable efforts to obtain “green” certification for the project. As a condition to issuance of a CO, Redeveloper shall submit to the EDA either (a) evidence of certification of LEED, or similar certification or (b) in absence of actual certification, evidence of compliance with the Green Building Policy including a detail of the specific energy-efficient/sustainable features or components implemented in the construction of the Minimum Improvements. 3. Look Back. There are three (3) components to the lookback. (1) At the time of completion of construction, if the amount of the Public Redevelopment Costs actually incurred is less than anticipated, the TIF Note will be reduced on a dollar for dollar basis. (2) Within 60 days after the earliest of (i) stabilization (90% leased); (ii) sale of property or; (iii) three years after the issuance of the CO, the developer will provide the City the financial data to calculate the actual rate of return to the developer. If, based on such review, the actual cash-on-cash (COC) return to the developer(s) exceeds 6%, then the TIF Notes will be reduced by 50% of the amount that results in a stabilized annual COC return equal to 6% for the term of the TIF Note; and (3) At the time of sale of the project during the first six (6) years after issuance of the CO, if the COC exceeds 6%, the amount that exceeds this threshold will be used to reduce the principal amount of the TIF Note. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 124 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 124 BRIDGEWATER BANK CONTINUED 4. Minimum Assessment Agreement. As of January 2, 2020, the minimum market value for the development shall be $5,883,300 and $11,766,600 as of January 2, 2021. The Assessment Agreement shall be in place until the TIF Note is paid in full. a) Entrepreneurial Center. Until the Redeveloper needs all or any part of the fourth floor for their business operations, Redeveloper shall use commercially reasonable efforts to cause the Fourth Floor to be used as an Entrepreneurial Center. For a period of ten (10) months following the date of the Agreement, the Redeveloper shall expend reasonable time, resources and efforts to secure a lease with a tenant who will operate an Entrepreneurial Center on all or a portion of the Fourth Floor upon terms and conditions reasonably acceptable to Redeveloper (an “EC Lease”). If Redeveloper is unsuccessful in securing an EC lease despite expending reasonable time, resources and efforts to do so, then Redeveloper may lease or use the Fourth Floor for any other purpose consistent with the Agreement. Thereafter if all or any portion of the Fourth Floor becomes available for lease (or if the then-current EC Lease expires or terminates) and Redeveloper does not need such available area for its own operations, then Redeveloper shall expend reasonable time, resources and efforts for at least ninety (90) days from the date of notice of the termination or expiration of any option notice period of the then-current EC Lease to attempt to secure an EC Lease prior to proceeding with any other lease or use of all or the applicable portion of the Fourth Floor. Notwithstanding any other provisions of this Agreement to the contrary, the obligations of the Redeveloper shall continue until the TIF Note is paid in full. The foregoing covenant shall be binding upon Redeveloper and any of its Affiliates. Beginning five (5) years from the issuance of a CO for the Minimum Improvements, the foregoing covenant shall not bind any subsequent fee owner of the Redevelopment Property. 5. Special Service District Maintenance. The Redeveloper understands that the project currently lies within the City’s Special Service District No. 2 and is subject to existing special service charges. Upon written request of the EDA or City, the Redeveloper will file any petition required under Minnesota Statutes, Chapter 428A in order to renew any levy of special service charges within the Special Service District. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 125 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 125 BRIDGEWATER BANK CONTINUED Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four-year deadline is May 11, 2023. Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. This date is May 11, 2024. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after May 11, 2024. Recommendations: None at this time. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 126 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 126 PARKWAY RESIDENCES Description: Parkway Residences (County #1326) is a redevelopment district adopted on May 18, 2020. The district encompasses six (6) parcels of land and was established to facilitate the construction of approximately a 95-unit market rate apartment. Adopted…………………….05/18/2020 Requested Date……………06/22/2020 Certified Date………………07/17/2020 First Increment……………….est. 2022 Decertifies………………….12/31/2047 Current PID Numbers: Parcel numberAddressOwner06-028-24-11-00174000 31st Street WSela Group LLC06-028-24-11-00184008 31st Street WSela Group LLC06-028-24-11-00194012 31st Street WSela Group LLC06-028-24-11-00204020 31st Street WSela Group LLC06-028-24-11-00214100 31st Street WSela Group LLC06-028-24-11-00224108 31st Street WSela Group LLC Fiscal Disparities Election: The City will elect to calculate fiscal disparities from inside (B election) the district. Frozen Tax Rate: 121.682% Obligations: It is anticipated there will be one PAYGO Note in this district as follows:  $3,350,000 and paid with 95% of the TIF generated from the project. The Note has not yet been issued. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 127 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 127 PARKWAY RESIDENCES CONTINUED Other Development Agreement Compliance: 1. Commencement and Completion of Construction. The Redeveloper shall commence construction of Phase I by May 31, 2020 and be substantially completed by August 31, 2021. Phase II shall commence by October 31, 2021 and be substantially complete by August 31, 2022. Phase III shall commence by September 30, 2023 and be substantially complete by August 31, 2024. 2. Green Building Policy. In the construction of all Phases, Redeveloper will comply with the City’s Green Building Policy as most recently amended at the time of Contract execution and incorporating sustainable features to include solar panels on the Phase I Large Apartment Component, solar-ready roofs on Phase II and Phase III of the Minimum Improvements; white roofs and partial green roofs throughout the Minimum Improvements; insulated underground parking structures and EV charging outlets in the majority of indoor parking spaces; and LED lighting. In addition, Redeveloper will construct the Phase I Small Apartment Component as a Demonstration Building, including a net zero energy performance design, high-performance insulation and windows, energy-efficient lighting and mechanical systems, and solar roof panels. 3. Inclusionary Housing. The Redeveloper agrees to reserve 24 of the units of the renovation portion of the project for households at or below 50% of the Area Median Income (AMI) and 6 units in Phase I for residents at or below 60% of AMI for at least 25 years following building occupancy. The monthly rental price shall include rent and utility costs as determined annually by MHFA for the Housing Tax Credit Program. The Redeveloper will assist any current residents in the Renovation Component with relocation and moving and transition costs during the Phase I construction period. 4. Minimum Assessment Agreement. As of January 2, 2022 the minimum market value for Phase I, shall be $25,650,000. The Assessment Agreement shall be in place until the TIF Note is paid in full or the TIF District terminates, whichever is sooner. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 128 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 128 PARKWAY RESIDENCES CONTINUED 5. Look Back. A portion of the tax increment assistance in the principal amount of $2,250,000 will be subject to a two-part lookback to be performed by the EDA’s Municipal Advisor upon stabilization (defined as the date the Phase I Large Apartment Component of the Minimum Improvements achieve 93% lease-up). First, if Redeveloper’s total actual Public Redevelopment Costs are less than those projected, the principal amount of the TIF Note will be reduced by such difference. Second, if Redeveloper’s cash-on-cost return for the Phase I Large Apartment Component exceeds 6%, $2,250,000 of the principal amount of the TIF Note will be reduced by an amount equal to 50% of the amount that results in a stabilized 6% cash-on-cost return over the term of the TIF Note. In addition to the two-part lookback upon Stabilization, the TIF Note will be subject to adjustment if Redeveloper fails to commence construction of Phase II and/or III of the Minimum Improvements by the dates agreed upon for the commencement of construction for such Phases. The principal amount of the TIF Note will be reduced by $550,000 for each Phase for which construction has not commenced by the date required under the Contract. 6. Property Management. The Redeveloper agrees to have the Minimum Improvements professionally managed by a property management company with substantial experience in operating mixed-use developments. The Redeveloper’s selection of the property management company is subject to approval by the Authority, which approval shall not be unreasonably withheld. 7. Public Art and Fiber. The Redeveloper agrees to incorporate public art install dedicated fiber optic connections in accordance with the City’s Planning Contract. Four Year Rule: MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel within the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. The four-year deadline is July 17, 2024. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 129 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 129 PARKWAY RESIDENCES CONTINUED Five Year Rule: At least 75% of tax increment revenues generated within the district must be used to pay for qualified costs within the district. This date is July 17, 2025. Geographic Enlargements: MN Statute 469.175 sub 4 (f) places limits on the length of time a TIF district may add parcels. No parcels may be added five years after the certification date. The district may not be enlarged after July 17, 2025. Recommendations: None at this time. Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 130 Management Review & Analysis - Tax Increment Financing Districts January 2021 St Louis Park, Minnesota Page 130 City Map of the TIF Districts Study session meeting of January 11, 2021 (Item No. 1) Title: Annual TIF district management reportPage 131 Meeting: Study session Meeting date: January 11, 2021 Discussion item: 2 Executive summary Title: Long term funding of Climate Action Plan Recommended action: No action required. This topic has been placed on the agenda to allow for the start of a conversation around long-term funding for the implementation of the city’s Climate Action Plan (CAP). Policy consideration: Does the city council wish to significantly increase the allocation of resources towards the implementation of the CAP? Where should these additional resources come from? How should the allocation of resources to implement the CAP be prioritized? Summary: In February 2018 the city council formally adopted the city’s CAP. The goals of the plan are some of the most robust of any city in Minnesota. The biggest bowl outcome of the plan is for the community to achieve total carbon neutrality by 2040 with seven important midterm goals set for 2030. Since 2018 the city has increased its investment in the implementation of the CAP including the reorganization of the Inspections Dept into the Building and Energy Dept and the creation of a Sustainability Division that includes a Sustainability Manage r and a Sustainability Specialist. In addition to the staff resources just noted, from a “systems” perspective other financial investment has been made over time in capital or programmatic initiatives related to the CAP. More information on those investme nts is provided later in this report. During the development of the 2021 budget staff heard commentary from the council regarding the need for the city to significantly increase it investment into implementing the CAP from where things stand today. Given potential impacts in doing so it’s important to begin conversations around this topic sooner than later. Financial or budget considerations: Last July staff provided council with a very rough estimate of the annual investment the city might need to make in the form of incentives to meet 2030 midterm goals 1-5. As noted in the staff report, it was estimated the city would need to increase its annual funding commitment between now and 2030 by approximately $1.9 to $2.4 million /yr. NOTE - Not included in this estimate as an offset are the direct and indirect benefits the city, businesses and residents will experience, such as energy cost savings and reducing the community’s carbon footprint. Additional or new sources of funding and/or budget and service shifts will need to be identified to significantly increase resources to implement the CAP. Strategic priority consideration: St. Louis Park is committe d to continue to lead in environmental stewardship. Supporting documents: Discussion and Appendix A Climate Action Plan (Feb. 5, 2018) J uly 27, 2020 staff report Prepared by: Tom Harmening, city manager Study session meeting of January 11, 2021 (Item No. 2) Page 2 Title: Long term funding of Climate Action Plan Discussion To help stimulate the conversation at the study session staff has posed a series of questions for council consideration. Many of the questions go hand in hand. Keeping in mind this is intended to be the start of the conversation, staff is not expecting the council to be able to provide answers or guidance on all of the questions. It’s also expected the council may disagree with some of the questions identified, it may want to rephrase some of the questions, and/or add additional questions for discussion. And that’s OK. What’s important is that we start talking about where the city is going with the CAP . What has been the city’s financial commitment to achieving the goals of the CAP thus far? The city’s budget and capital plan have both direct and indirect expenses associated with our goal of carbon neutrality. Directly the city now has a sustainability d ivision dedicated to fulfilling the climate action goals from the city council. The budget for the sustainability d ivision in 2021 is $432,043. Of this , $100,000 is designated for new and existing offerings under the Climate Champions program. We have also designated $250,000 out of the EDA budget for the Solar Sundown and perhaps other programs. Indirectly staff has taken a holistic approach to sustainability. For example, as we maintain our facilities, upgrades are done to increase our energy efficiency. Items like high efficiency air conditioning units and LED lights are being retrofitted citywide. We have also put in automated lighting and water controls to increase energy savings in our buildings. Equipment is being converted to alternative fuel sources. This includes Zamboni’s, hand tools, vehicles, and tractors. Our capital program also has an increased cost as we “connect the park” to make our city more walkable. Appendix A provides a list of the many initiatives throughout the city that have been undertaken since 2018 alone to promote sustainability and carbon reduction. As you will note, the e xamples are numerous and amount to hundreds of thousands if not millions of dollars in investment. Does the city council wish to significantly increase the allocation of resources towards the implementation of the CAP and where should these additional resources come from? Given the current unknowns of resources or incentives that might be made available by the federal or state government in the future (e.g. grants, loans, tax credits), this question focuses on additional financial resources that could be generated by the city. The options are limited to develop a reliable and sustainable stream of significant revenue ($2 million /yr.?) over a number of years. Examples include: •Generate additional revenue via general property taxes, implementation of an EDA levy (a property tax), create some type of utility fee, etc. •Reallocate/reprioritize existing revenues the city spends to deliver current services and programs to the community and redirect them to the CAP. •Seek out new tools via special legislation that allows the city to incentivize private property owners to reduce their carbon footprint. An example would be the special legislation we will be proposing for the upcoming session that would allow the city to use the special assessment tool to lend money to private property owners to make energy improvements to their property. For some time now we have used this approach Study session meeting of January 11, 2021 (Item No. 2 ) Page 3 Title: Long term funding of Climate Action Plan to incentivize the installation of sprinkler systems in commercial properties which is authorize d by state statute. • Combination of the above or others . How should the allocation of resources to implement the CAP be prioritized? Assuming there is a finite number of dollars that can be used to achieve CAP goals, where should these dollars first be used? Several examples follo w: • The two largest sources of emissions in the community are buildings and travel. Emissions from buildings make up 58% of all emissions in St. Louis Park, followed by transportation (39% of total emissions within the community). Emissions from buildings in the commercial sector are nearly double the emissions of the residential sector. When we discuss different types of financial incentive programs, should we first apply a laser focus on incentives that have the greatest carbon reduction impact per dollar (referred to as “impact efficiency” in the July report)? • Using the city’s operation as an example, should money first be spent on those things that have a reasonable payback period, e.g. 15 years or less? Or, is the goal purely to reduce carbon generated by the city’s operation regardless of payback? An example would be the replacement of lighting at the city’s ball fields with LED fixtures. Given the limited use of the lighting, the payback period probably exceeds the life of the lighting, but it does meet the goal of reducing carbon. Or, is the answer “it depends” on what’s proposed and that additional metrics would need to be developed to provide guidance (e.g. relative amount of the investment for a specific improvement and its carbon reducing impact as compared to overall resource availability)? • How does the prioritization of CAP goals 6 and 7 (travel and solid waste) fit into the mix? For example, is the council interested in incentivizing low - and no-carbon travel strategies beyond funding Connect the Park? • Should the main priority be working with the state and neighboring communities, knowing that SLP is part of a larger community system and the state continues discussions in this area? • Even if incentive programs for all seven midterm goals were to be fully funded, only so many programs can be implemented and administered at one time. Should programs be phased in by impact efficiency, or should the CAP implementation schedule be adhered to as best as possible (which calls for a more balanced approach to making progress in each CAP goal every year)? As a part of discussing this topic area staff would like to briefly outline an initiative being studied involving a potentially significant additional investment in a community-based tree planting initiative on public and private property. The intent is to help meet our carbon goals along with realizing other benefits associated with increasing the community’s tree canopy. This idea was inspired by the global “Trillion Trees” initiative . While our CAP identifies carbon offsets from initiatives like planting trees as an “Advanced Strategy”, from the perspective of purely reducing carbon, from an ROI perspective a much more immediate and perhaps greater impact would be achieved by prioritizing finite resources to other goals in the plan (see first bullet under this section – addressing emissions from buildings). Study session meeting of January 11, 2021 (Item No. 2 ) Page 4 Title: Long term funding of Climate Action Plan Prior to devoting significant financial incentives to the private sector should the city first use these dollars to undertake additional large investments in making its own operation carbon neutral as well as undertake initiatives such as building community solar? This question goes hand in hand with the previous question. The city has complete control over making investments to its own operation to make it as carbon neutral as possible. Examples include the complete build out of solar on the city’s buildings, and in particular the Rec Center. Another would be to seek out and take advantage of opportunities to build solar installations in the community to the extent they may exist. In other words, at least in the shorter term would it make more sense to primarily focus on those things the city has more direct control over. Can we expect there will be a sufficient number of private property owners that will take advantage of financial incentives the city makes available thereby insuring progress on the goals of the CAP? Currently, the city has little authority to re quire private property owners to make energy saving/carbon reducing enhancements to their properties. In the July 27, 2020 staff report it was roughly e stimated that to meet midterm goals 1-5, a community investment of between $9.2 – $121.5 million for commercial property owners and $66.6 – $168 million for residential property owners would be required (depending on square footage of each property, amount and cost of equipment, level of insulation needed, number of solar panels, etc.), not including the incentives the city provides. NOTE – this does not take into consideration offsets to those investments by the savings private property owners would experience in energy costs. The upcoming Solar Sundown incentive program may provide some sense of the community’s interest in making energy/carbon saving improvements to their property. Undertaking some kind of surve y or additional public input process as noted below might also serve to gauge interest. Before allocating significantly more resources to the CAP, should the city invite additional public discussion or input? The premise behind this question is that property tax payers will be asked to help fund implementing the CAP in a robust way and/or may be impacted by the elimination or reduction in some services and programs the city provides in order to shift those dollars to CAP initiatives. Other questions to contemplate • Are there equity considerations to keep in mind as we discuss potential revenue streams for CAP related financial incentive programs? • How can the Environment and Sustainability Commission help answer questions on prioritization? Study session meeting of January 11, 2021 (Item No. 2 ) Page 5 Title: Long term funding of Climate Action Plan Appendix A: Climate Action Plan 2018-2021 financial commitment Note: this list includes capital and operating expenses for programs, projects, and policies referred to in the Climate Action Plan and managed by many departments. It is not intended to be all-encompassing, rather, to provide a sense of the city’s financial commitment thus far. 2018 Initiative Cost (if applicable) Climate Action Plan online resource hub created N/A All-electric power tools purchased (battery operated) • Weed Whips, Leaf Blowers, Pole Saws, and Small Chain Saws 25,000 Rec Center window and door replacements, AC replacement, roof replacement 735,000 Browndale Park hockey rink lights replaced 95,000 Install flashing yellow arrows at various signalized intersections 50,000 2019 Initiative Cost (if applicable) Electric vehicle chargers installed at City Hall 15,000 City 100% subscribed to Windsource 98,000 (annual) Sustainability Division established, two FTEs 25,794 Glenhurst house renovated to maximize energy efficiency 52,370 Electric Vehicle supply equipment ordinance passed N/A Mitsubishi Outlander plug-in hybrid and a Chevy Bolt EV added to fleet 67,500 Louisiana Oaks Park trail poles and lights replaced 35,000 Retrofit lighting in MSC offices to LED 5,000 Retrofit lighting at City Hall to LED, add motion sensors 23,000 City Hall new high efficiency rooftop AC 80,000 Convert Cedar Lake Road Streetlights to LED 350,000 Construct Roundabout at Cedar Lake Road and Zarthan Avenue 750,000 Install flashing yellow arrows at various signalized intersections 25,000 Arena locker room shower fixture replacement (metered shower heads) 50,000 Study session meeting of January 11, 2021 (Item No. 2 ) Page 6 Title: Long term funding of Climate Action Plan 2020 Initiative Cost (if applicable) Windsource (annual) 98,000 Efficient Building Benchmarking ordinance year one 31,000 Deconstruction of former interpretive center 48,000 Second solar array installed at MSC 75,000 Sustainability Division (staff) 201,261 Aquatic Park Entrance Renovation 200,000 Rec Center banquet room AC replacement 90,000 Electric vehicle chargers installed at Rec Center and WHNC 50,000 Connect the Park 2/3 complete 15,275,164 Retrofit lighting at Police Department to LED 18,000 Westwood Hills Nature Center Construction 11,827,890 Install flashing yellow arrows at various signalized intersections 75,000 Hybrid police cruiser 48,000 Nature center tractor 50,000 2021 Initiative Cost (if applicable) Windsource (annual) 98,000 Solar Sundown 120,000 Climate Champions for business 100,000 Sustainability Division (staff) 230,739 Greenhouse gas emissions 2016-2020 inventory and analysis 30,000 Efficient Building Benchmarking ordinance year two 26,000 Expansion of public EV charging stations, TBD depending on grant funding TBD Trees initiative TBD Convert MSC exterior and lot lights to LED 20,000 Retrofit lighting in MSC traffic, storage rooms and remaining restrooms to LED 5,000 Replace 20 year-old City Hall 3rd floor AC with modern unit (incl. environmentally safer refrigerant) 110,000 Various energy projects at Rec Center, potentially including solar TBD Rezone MSC bay lights motion sensors to turn on only the lights in the area of motion NA Convert Louisiana Avenue streetlights to LED 200,000 Convert Monterey Drive streetlights to LED 300,000 Construct Roundabout at Monterey Drive and Beltline Avenue 750,000 Study session meeting of January 11, 2021 (Item No. 2 ) Page 7 Title: Long term funding of Climate Action Plan Other ongoing, miscellaneous CAP -related projects, programs, and policies: • Communications staff time to create various communications and engagement initiatives (videos, webinars) • Project review for compliance with the city’s Green Building Policy (staff time) • Revisions and updates to the city’s Green Building Policy (staff time) • Requiring solar installation when TIF is requested, to the extent possible • Parking ordinance review and updates (staff and consultant costs) • Electric vehicle charging ordinance review and updates • Allowing two -family dwellings in low -density residential areas on appropriately sized lots • Residential energy efficiency rebates o 2018: $30,112 o 2019: $25,177 o 2020: $ 2,850 o 2021 budget ed $40,000 • Home Energy Squad program subsidy o 2018: $3,750 o 2019: $2,050 o 2020: $18,965 o 2021 budgeted $25,000 • Micromobility/scooter share program • Tree planting on public and private property • Events such as Ecotacular, Earth Day celebrations, Ride and Drive • Annual street light replacement with LED • Replacement of traffic signals with roundabouts • Rainwater Rewards program • Rain garden installation in city projects • Solid Waste staff time (incl. reuse events, organics, C&D waste initiatives, Recycling Champions) • Use of Source -Separated Organic Materials (SSOM), aka “food scrap compost” in city projects • SWLRT management • Transit Oriented Development projects • Accessory Dwelling Units ordinance • Staff and lobbyist time for Advanced Building Energy Standard Meeting: Study session Meeting date: January 11, 2021 Discussion item : 3 Executive summary Title: Future study session agenda planning and prioritization Recommended action: The city council and city manager to set the agenda for the special study session on Jan. 19, 2021 and the regularly scheduled study session on Jan. 25, 2021. Policy consideration: Not applicable. Summary: This report summarizes the proposed agenda for the special study session on Jan. 19, 2021 and the regularly scheduled study session on Jan. 25, 2021. Also attached to this report is: -Study session discussion topics and timeline -Proposed topics for future study session discussion: Topic Proposed by Councilmember City council meetings – agenda and video presentation Tim Brausen Financial or budget considerations: Not applicable. Strategic priority consideration: Not applicable. Supporting documents: Tentative agenda – Jan. 19 and 25, 2021 Study session discussion topics and timeline Study session topic proposal Prepared by: Debbie Fischer, administrative services office assistant Reviewed by: Maria Solano, senior management analyst Approved by: Tom Harmening, city manager Study session meeting of January 11, 2021 (Item No. 3) Page 2 Title: Future study session agenda planning and prioritization JAN. 19, 2020 5:30 p.m. Special study session - To be held via videoconference Tentative discussion items 1.2021 legislative priorities – meeting with elected and appointed reps – Administrative services (50 minutes) Annual meeting with the city’s state legislators, Met Council representative and Hennepin C ounty Commissioner to discuss 2021 Legislative Priorities. JAN. 25, 2021. 6:30 p.m. Study session - To be held via videoconference Tentative discussion items 1.Citywide speed limit evaluation – Engineering (60 minutes) Staff will updat e council regarding the speed limit evaluation and recommendations for implementation in s ummer 2021. 2.Boards and commissions discussion– Administrative services (45 min) Staff will provide an update on the 2021 annual recruitment and appointment process for the city boards and commissions. 3.2021 study session review and prioritization – Administrative services (30 minutes) Review study sessions for 2021 and discuss council priorities. 4.Future study session agenda planning – Administrative services (5 minutes) Communications/meeting check-in – administrative services (5 minutes) Time for communications between staff and council will be set aside on every study session agenda for the purposes of information sharing. Written reports 5.Community technology advisory commission smart cities initiative 6.SLP Living TIF request 7.Housing programs and funding resources update 8.Sustainability Division update for Q1 2021 9.Fourth quarter investment report (Oct. – Dec. 2020) Study session meeting of January 11, 2021 (Item No. 3) Page 3 Title: Future study session agenda planning and prioritization Study session discussion topics and timeline Future council items Priority Discussion topic Comments Timeline for council discussion 3 Discuss public process expectations and outcomes Staff is working on the approach for undertaking this discussion. 2nd qtr. 2021 4 Revisit housing setback, FAR , & more related to affordable housing Going to planning commission for discussion. Discussion 2/22/21 5 Home-based businesses (HBB ) Written report 1/11/21 6 Public forums at council mtgs 9/23/19 SS. Staff doing research of other cities. 2nd qtr. 2021 8 Community and neighborhood sidewalk designations To be combined w/ Connect the Park discussion. 2nd qtr. 2021 9 Remove mint & menthol exemption from existing flavored tobacco policy On hold pending court decision *On hold 10/13 -Easy access to nature, across city, starting w/ low-income neighborhoods -WHNC Access Fund Combine P10 and P13 . *On hold pending direction from school district. *On hold 11 Conversion therapy ban Staff is preparing information for council Report on 2/22/21 + Creating pathways to home ownership for BIPOC individuals and families TBD + Youth on commissions 1 st reading on 1/4/21, second reading 1/19/21 2nd reading 1/19/21 + Boards and commissions: recruitment & appointment process, other Discussion on 1/25/21 + Transportation commission TBD Council items in progress Priority Discussion topic Comments Next Steps 7 STEP discussion: facilities Council asked staff to consider lending options to assist STEP in buying a new bldg. STEP is searching for a new facility + Policing discussion Discussed 7/27/20 & 9/29/20 . Discussion on 2/22/21 Study session meeting of January 11, 2021 (Item No. 3) Page 4 Title: Future study session agenda planning and prioritization Meeting: Study session Meeting date: January 11, 2021 Written report: 4 Executive summary Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments Recommended action: This staff report outlines Paster Development’s application for Tax Increment Financing (TIF) in connection with its proposed Texa-Tonka Apartments re development. Policy consideration: Is the EDA willing to consider entering into a redevelopment contract to reimburse the Developer for up to $2.6 million in qualified costs through tax increment financing generated by the project to enable it to achieve financial feasibility? Summary: St. Louis Park -based Paster Development has an option agreement to acquire nine adjoining parcels located at the northeast corner of Texas Avenue and Minnetonka Boulevard. Paster Development’s proposed plans call for the removal of the vacant 4,500 square foot office building at the intersection along with the vacant parking lot to the north, and construction of a two-, four- and five-story apartment and townhome development consisting of 112 residential units . Parent company Paster Properties would then own and manage the new housing for the long term. The proposed $26.3 million project include s a mix of studios, one -, and two-bedroom units. The apartment/townhome buildings would be mixed income with 90 units (80 percent) leasable at market rate and 22 units (20 percent) affordable to households at 50 percent of area median income for 25 years , which exceeds the city's Inclusionary Housing Policy requirements. Financial or budget considerations: Due to considerable extraordinary costs associated with the proposed development, Paster Development applied to the EDA for tax increment financing (TIF) assistance. Ehlers, the EDA’s financial consultant, examin ed the project’s pro forma to determine what, if any, level of financial assistance was necessary for the project to become financially feasible . After review, Ehlers determined that up to $2.6 million in TIF assistance is warranted to enable the project to proceed. Such assistance would be provided via a pay-as- you-go TIF Note . Given current estimates of market value, it is estimated that the project’s TIF Note would be paid off in approximately 12 years (on a net present value basis). Such assistance would derive from the establishment of a new housing TIF district. Strategic priority consideration: St. Louis Park is committed to providing a broad range of housing and neighborhood oriented development. Supporting documents: Discussion Prepared by: Greg Hunt, economic development coordinator Reviewed by: Karen Barton, community development director Approved by: Tom Harmening, EDA e xecutive director and city manager Study session meeting of January 11, 2021 (Item No. 4) Page 2 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments Discussion Site information: The proposed redevelopment site is located on the northeast corner of Minnetonka Boulevard and Texas Avenue. The site is in the Texa-Tonka neighborhood, immediately east of the recently renovated Texa-Tonka Shopping Center. Proposed redevelopment site for Texa Tonka Apartments Site area (acres): 1.86 acres Current use: Surrounding land uses: vacant 4,500 sf commercial building, vacant parking lot, vacant residential lot North: 29th Street & single -family homes East: Rainbow Park & single -family homes South: Minnetonka Boulevard & commercial uses West: Texa-Tonka Shopping Center & single -family homes Study session meeting of January 11, 2021 (Item No. 4 ) Page 3 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments Current 2040 land use guidance Current zoning COM - commercial RM - medium density residential C-1 neighborhood commercial R-3 two -family residence Proposed 2040 land use guidance Proposed zoning RH - high density residential PUD planned unit development Background: The vacant one -story commercial building on the northeast corner of Minnetonka Boulevard and Texas Avenue has been vacant or underutilized for many years. The vacant parking lot located on the east side of Texas Avenue was constructed in the 1950s to provide overflow parking for the Texa-Tonka Shopping Center across the street. The parking lot has been unused for several decades and has fallen into disrepair. Present considerations: Paster Development has an option agreement for the vacant commercial building and vacant parking lot on the northeast corner of Texas Avenue and Minnetonka Boulevard. The Developer proposes two multifamily buildings; a four- to five -story apartment building on the south side of the site with 101 rental units, and a two-story townhouse building with 11 rental units on the northern portion of the site. Both buildings would feature walk -up units. The development includes amenity spaces, underground parking, first-floor enclosed parking as well as surface and bicycle parking. Additionally, a public trail connection would be constructed through the site to help connect the adjacent neighborhood to the Texa-Tonka Shopping Center, Rainbow Park and North Cedar Lake Regional Trail. Rendering of proposed Texa-Tonka Apartments The housing units would include a combination of studio, alcove, one bedroom, one bedroom plus den, one bedroom, and one bedroom plus den uses. They would be designed as a combination of traditional apartment units, walk -up apartments and walk -up style townhomes. The unit mix would be as follows: Study session meeting of January 11, 2021 (Item No. 4 ) Page 4 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments Unit Type Number of Units Number of Bedrooms Studio 10 10 Alcove 26 26 One bdrm 50 50 One bdrm & one bdrm +den 3 3 Two bdrm 10 20 Two bdrm + den 2 4 One bedroom, townhome 1 1 Two bedroom, townhome 10 20 Total 112 134 Texa-Tonka Apartments would be a single-phased residential development. Pending approval of its land use applications and financing, the Developer plans to commence construction in the spring/summe r of 2021 and complete construction by late summer 2022. The Developer’s parent company, Paster Properties, would own and manage the new housing for the long term. Inclusionary housing: The proposed apartment/townhouse development would be mixed- income with 90 units (80 percent) leasable at market rate and 22 units (20 percent) affordable to households at 50 percent of area median income (AMI). Per the Metropolitan Council, the 50 percent AMI for a family of four is $51,700. Monthly gross maximum rental rates at 50 percent AMI range from $905 for a studio unit to and $1,163 for a two-bedroom unit. The proposed amount of affordable housing exceeds the city’s inclusionary housing requirements. The affordable units would be spread evenly through all of the units in both buildings. Racial equity and inclusion: The community area surrounding the proposed development is one of the most diverse in the city, with the highest number of people of color per acre. The community also includes some of the lowest median income households and the higher percentage of renters in the city. Very little private investment has occurred in this area during the last several decades. This development, along with Paster Properties’ recent renovation of the adjacent Texa-Tonka S hopping Center, provides opportunities for further investment in these communities. Outreach activities conducted as part of the city’s small area plan process included opportunities to gather input from existing renters, people of color, and non-native English speakers to obtain ideas on what community members would like to see in the project area. The development will provide a variety of housing types at marke t rate and at 50% of AMI to create more housing options for local residents within the project area for 25 years. Additionally, the site is located on a frequent bus route with service to downtown and large employers, and near the Cedar Lake Regional Trail, offering quick non -motorized transportation to downtown and recreational opportunities. Climate Action Plan: The proposed buildings will adhere to the city’s Green Building Policy and will be designed to Green Communities criteria. Sustainability features include: a rooftop solar panel installation generating a minimum of 26 KW, enhanced insulation and air tightness for energy efficiency, Energy Star appliances, energy efficient mechanical systems, water sense Study session meeting of January 11, 2021 (Item No. 4 ) Page 5 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments fixtures, drought tolerant plantings, efficient irrigation, and low VOC paints and materials. Additionally , the development includes bike parking and exceeds the city’s requirements for electric vehicle charging stations by providing 12 level two charging stations and conduit for an additional seven level two stations. The development is located on Metro Transit’s high frequency bus Route 17 and Route 667 Express. The site is also located near the North Cedar Lake Regional Multi-Use Trail and will include a public trail connection through the site . Proximity to these transit amenities reduce the need for single -occupancy vehicles and vehicle miles traveled to reduce vehicle emissions. The Developer: Paster Development is an affiliate of Paster Properties, a St. Louis Park-based commercial real estate and property management company. The company has been engaged in commercial development for over 70 years and recently completed mixed use developments in Minneapolis and Minnetonka. Paster Properties is also the new owner and developer of the recently renovated Texa-Tonka Shopping Center across the street from the subject redevelopment site. Application for Tax Increment Financing assistance: Providing low -density townhomes on a large portion of the re development site to ease the transition from neighboring single -family houses results in a lower density project than what is allowable under the zoning ordinance. Also, the south end of the proposed redevelopment site was once the location of a gas station and through the years there have been several dry cleaners in the general area. These enterprises left impacts which affect the redevelopment site and will require state -approved environmental remediation. The northern half of the site has poor structural soils to a depth of about 30 feet which must be replaced to support any multi-story building. These extraordinary redevelopment costs, along with the cost of underground structured parking, roof-top solar installation, and the mix ed-income nature of the development create a gap in the project’s proforma. To mitigate the project’s estimated financial gap , the Developer applied for $3,830,000 in tax increment financing (TIF) assistance. Overview of proposed project’s sources and uses: Tax increment financing uses most of the increased future property taxes generated by a new development to finance certain qualified development costs incurred by that project for a limited period to enable the redevelopment to move forward. The EDA’s financial consultant, Ehlers, examin ed the information provided within the Developer’s TIF application based on general industry standards for land, construction, and project costs; rents; operating expenses; fees; underwriting and financing criteria; and project cash flow. Based on this analysis, Ehlers consulted with staff to determine the extent to which the proposed project exhibits a financial gap justifying the provision of TIF assistance. The estimated total development cost (TDC) to construct the proposed Texa-Tonka Apartments is approximately $26.3 million. The project’s anticipated sources and uses are summarized in the tables below along with their respective percentage of the total development cost. Study session meeting of January 11, 2021 (Item No. 4 ) Page 6 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments Project financing sources: Financing sources for the construction of the proposed development are as follows: SOURCES AMOUNT ($) % of TDC First Mortgage Debt $18,605,685 70% Developer Equity $4,616,926 18% City of St. Louis Park TIF (proposed) $2,600,000 10% MC LCDA grant $465,000 2% TOTAL Project Sources $26,287,611 100% Financing structure : The Developer anticipates using a conventional 30-year mortgage at an interest rate of 4.25%. Moreover, the Developer has proposed to finance the project with a mortgage that is 70% of the total development cost. Based on current underwriting conditions, it appears the Developer is maximizing its first mortgage debt. The Developer will also bring about $7,521,959 in equity which is roughly 28% of the total development costs since it has elected to use additional equity to monetize the proposed TIF Note . The proposed financing terms are typical and reasonable for a project of this nature. Project uses: Uses for the construction of the proposed development are as follows: USES AMOUNT ($) Per Unit Land $2,253,000 $20,116 Construction Costs $19,906,300 $177,735 Permit & Public Fees $770,120 $6,876 Professional Services $1,398,630 $12,488 Financing Costs $909,561 $8,121 Developer Fee $800,000 $7,143 Cash Accounts/Escrows/Reserves $250,000 $2,232 TOTAL Project Costs $26,287,611 $234,711 Affordability & Extraordinary Cost Estimates Amount ($) Building demolition and disposal $40,000 Environmental Remediation $590,000 Soil mitigation, removal and earthwork $650,000 Affordable Impact $2,930,000 TOTAL Extraordinary Costs $4,210,000 Construction/Affordability impact*: The cost of demolition, contamination cleanup, site and public improvements, along with the income reduction of the affordable units typically make mixed -income housing developments infeasible without public assistance . It is estimated that the affordability impact over 25 years will amount to $2,930,000 or $133,000 per unit. *Affordability impact: Due to decreased rental income from the proposed project being 20% affordable, there is insufficient cash flow to provide a market rate of return, pay ongoing operating expenses, and service the debt outstanding on the property. This leaves a gap in the Study session meeting of January 11, 2021 (Item No. 4 ) Page 7 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments funding for the project and makes this housing development infeasible without financial assistance. Under MN TIF statutes, costs to construct affordable housing are an eligible expense that may be reimbursed through tax increment originating from a housing TIF District. Developer fee: The developer fee is approximately 3% of the total development costs, which is within the industry standard range for similar projects. Proposed level of assistance: The recommended level of assistance for the project was determined by analyzing the affordability impact over 25 years and forecasting the project’s return on investment. Ehlers concluded that tax increment assistance in the amount of $2.6 million is necessary to make the project financially feasible . This level of assistance , along with the $465,000 grant received from the Metropolitan Council, would offset enough of the extraordinary site costs and affordability impact described above to allow the proposed project to achieve a rate of return sufficient to attract investors thereby enabling it to proceed. The Developer has indicated the recommended level of assistance is acceptable. Consistent with previous EDA redevelopment agreements, a "lookback" provision would be incorporated into the redevelopment agreement with the Developer. The Developer would be required to submit verified final project costs and reports detailing the actual financial performance of the project. The lookback provision establishes a benchmark return based on industry standards for similar projects. The lookback provision ensures that if the project’s total development costs are appreciably lower and/or the development’s net operating income is appreciably higher than the estimates provided, the EDA would share economically in the success of the project by reducing the amount of TIF assistance provided. TIF Note: The proposed Texa-Tonka Apartments will take approximately 18 months to construct. It is anticipated that the first increment would be paid in 2023. Given current estimates of market value, it is estimated that the $2.6 million TIF Note would be paid off in approximately 12 years (on a net present value basis). It is projected that the Note would terminate with the final payment on February 1, 2034. Payments on the Note would be made on a "pay -as-you-go" basis, which means that as the Developer pays the project’s property taxes, a portion of those taxes (the “tax increment”) are paid back biannually to the Developer under the terms of the TIF Note. Thus, payments to the Developer will only be made as the project’s property taxes are received. This is the preferred financing method under the city's TIF Policy. The Note would bear interest at the lesser of 4.25%, or the Developer’s actual rate of financing. The size of the TIF Note would be based upon no inflationary value in the project (as with all projects). This is a conservative estimate and thus the TIF Note could be paid off earlier than estimated. As with most EDA redevelopment contracts, the Developer would be required to execute a Minimum Assessment Agreement for the value utilized for projecting the amount of TIF assistance available. TIF district: The tax increment to be provided to the proposed development would derive from a newly established housing TIF district. With 20 percent of the units affordable to households at 50 percent of area median income, the Texa-Tonka Apartments development would meet the statutory requirements for establishment of a housing TIF district. Once the tax increment obligation to the Developer is paid off, the council will have the option to decertify the district or to keep it open for TIF pooling purposes. The council may wish to consider keeping the new Study session meeting of January 11, 2021 (Item No. 4 ) Page 8 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments housing district open in order to create a new revenue stream to help finance future affordable housing in the city as the Park Center TIF District (one of the city’s only two housing districts) is scheduled to decertify at the end of 2023. Such a TIF district would allow for up to 26 years of tax increment by state statute. Property value and taxes: The current combined assessed market value of the nine parcels constituting the subject redevelopment site is just over $2.1 million. This is the proposed TIF district’s Base Value. The combined estimated market value of these properties upon the proposed development’s completion (for TIF estimation purposes) is $26.4 million. Most of this value (minus the Base Value) would be captured as tax increment and used to make payments on the TIF Note to the Developer until it is paid off. The city, county and school district would continue to receive the property taxes collected on the subject site’s Base Value. Analysis of development’s conformity with the city’s TIF Policy: As proposed, the Texa-Tonka Apartments meets the following Minimum Qualifications as outlined in the city’s TIF Policy: • Promotes neighborhood stabilization and revitalization by adding to and diversifying the city’s housing stock. • Provides a balanced and sustainable housing stock to meet diverse needs both today and in the future. • The project will be consistent with the city’s Comprehensive Plan and zoning ordinances upon approval of pending planning amendments. • The Developer has demonstrated that the proposed project is not financially feasible “but- for” the use of tax increment financing. • The Developer has a proven track record of successful real estate development. performance and has demonstrated the capability to fully complete the multi-phase project as proposed. The proposed project meets the following “Desired Qualifications” as outlined in the TIF Policy: • Creates a substantially higher ratio of property taxes paid after redevelopment and provides a significant increase in taxable market value. • Facilitates new construction on a site which would not likely be redeveloped to its optimal use without such assistance. • Redevelops underutilized property. • Creates high-quality buildings (e.g. sound architectural design, quality construction and materials) with underground parking, public fe atures and sustainable elements. In addition to the above, the proposed development would have the following additional benefits: • Creates a cohesive and attractive , mixed income, multi-family development that is pedestrian-scale , walkable and connects the adjacent neighborhood consistent with the city’s strategic priorities of providing a broad range of housing and neighborhood- oriented development and being a leader in racial equity and inclusion to create a more just and inclusive community for all. Study session meeting of January 11, 2021 (Item No. 4 ) Page 9 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments • Complements, integrates with, and invigorates the surrounding neighborhood consistent with the city’s strategic priority of creating opportunities to build social capital through community engagement. • Creates a more mixed-use environment with proximity to the recently renovated shopping center across the street and helps stabilize the commercial businesses in the area by increasing the potential customer base. • Intensifies the subject site and makes higher use of the property. • Provides the city with additional affordable housing units at 50 percent AMI for 25 years. • Incorporates numerous Green Building design and features consistent with the city’s strategic priority of continuing to lead in environmental stewardship. • Lies within proximity to current bus transit and bike lanes. • Provides convenient pedestrian and bicycle connections to regional transit and trails consistent with the city’s strategic priority of providing a wide variety of options for people to make their way around the city comfortably, safely, and reliably . • Incorporates Livable Communities and Transit Oriented Design principles. Grading under Project Report Card: Paster Development’s TIF application was graded according to the Project Report Card within the city’s TIF Policy. The application was graded as follows: • Promotes housing for large families. Twelve (or 11 percent) of the proposed 112 housing units have larger units for families , this percentage represented a grade of “C” on the scale. • Provides economic integration of rental or ownership projects. The proposed development will provide 22 units (20 percent) with rents that are affordable to households at 50 percent of area median income (AMI). This percent of affordable housing to total units translated to a grade of “A” on the scale. • Level of affordable housing provided Twenty percent the development’s housing units will be affordable to households at or below 50% AMI which represented a grade of “B” on the scale. • Ratio of soft costs to Total Project Costs. Soft costs of the total development cost were estimated at approximately $1.4 million or 5.3% of the total development costs, which corresponded to a grade of “A” on the scale. • Ratio of private to public financing $23.2 million in private development costs to $3,065,000 in public grant and TIF assistance equals a $7.58 private / $1 public ratio which garnered an “A” on the scale. • The value of the site before and after redevelopment For TIF estimation purposes, the current total taxable market value of the project site is estimated at just over $2,144,000. The projecte d market value of the property upon redevelopment is $26.4 million. This is a ratio of $1: $12.32 which represented an “A” on the scale. Study session meeting of January 11, 2021 (Item No. 4 ) Page 10 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments The proposed development received bonus points for: • assembling all the properties required for the redevelopment, • redeveloping underutilized/environmentally challenging property, • incorporating New Urbanism and livable communities design principles, • incorporating energy efficient and sustainability components, • being a fitting and balanced use of the property, • incorporating principles of livable communities, • likely to stimulate further investment in the surrounding neighborhood, • proximity to a city -designated priority redevelopment area or light rail • having a significant positive community impact , • being consistent with the city council’s strategic priorities and comprehensive plan Upon calculation of all applicable factors and bonus points, the proposed Texa-Tonka Apartments received a final grade of “B” according to the Project Report Card within the TIF Policy. Conformance with the city’s Business Subsidy Policy: Any TIF assistance provided to Paster Development for the proposed project would be exempt from state business subsidy requirements as it relates to housing (Section 116J.993, Subdivision 3(7)). Therefore, no public subsidy hearing would be required; however, the EDA would still be subject to TIF reporting requirements. Summary and recommendation: Based upon its analysis of the project’s proforma, Ehlers determined that the proposed Texa-Tonka Apartments redevelopment has a verified financial gap and is not financially feasible but-for the provision of tax increment financing. To offset this gap, it is proposed that the EDA consider reimbursing the Developer up to $2.6 million in pay -as- you-go tax increment generated by the project over a 12-year term. Such assistance would derive from a new housing TIF district upon completion of the proposed project and stabilization. Providing tax increment financing assistance to the proposed Texa-Tonka Apartments project makes it possible to redevelop blighted/underutilized property and construct a quality, multi- family housing development consistent with many goals of the 2040 Comprehensive Plan and the city council’s strategic priorities . It provides the community with an additional 90 market rate apartments and townhouses, as well as an additional 22 housing units at 50 percent of area median income for 25 years, which will help s support commercial businesses in the area. It brings the subject properties to significantly higher market value than they are currently and creates a potential new revenue stream to assist future affordable housing developments and programs. Lastly, t he proposed amount of TIF assistance is comparable to other developments the EDA has previously assisted. Paster Development’s proposed Texa-Tonka Apartments meets the city’s objectives for the provision of Tax Increment Financing as specified in the city’s TIF Policy. As noted above, the project meets all the Minimum and Desired Qualifications for providing TIF assistance and received a final grade of “B” according to the Project Report Card within the TIF Policy, and has demonstrated that it is not financially feasible but -for the provision of tax increment financing. Given these findings, staff supports reimbursing the Developer for eligible costs up to $2.6 million in pay-as -you-go tax increment generated by the proposed development to enable it to proceed. Study session meeting of January 11, 2021 (Item No. 4 ) Page 11 Title: Application for Tax Increment Financing Assistance – Texa-Tonka Apartments Next steps: As with all TIF applications, it is at the EDA’s discretion as to whether to provide the proposed Texa-Tonka Apartments development with tax increment assistance at the recommended level. Provided the EDA supports providing such assistance, the EDA will be asked to begin the formal process of establishing a new housing TIF district; the financial vehicle through which the assistance would be provided. The first step of which is to set a public hearing date . It is proposed that the public hearing for the establishment of the new Texa- Tonka TIF District be tentatively scheduled for April 5, 2021 in order to follow the Met Council’s approval of the development’s pending Comprehensive Plan amendment. The next steps in the TIF approval process would be as follows: 1. Negotiation of business terms for the provision of tax increment assistance . 2. Review of proposed business terms of redevelopment contract. 3. Hold public hearing on the establishment of the proposed housing TIF District. 4. Approval of TIF district plan and redevelopment contract – EDA and City Council. Meeting: Study session Meeting date: January 11, 2021 Written report: 5 Executive summary Title: Home -based businesses Recommended action: None at this time. The purpose of this report is to update council on proposed amendments to the rules for home-based businesses (called home occupations in the city code). S taff prepared the amendments based on planning commission discussions and questions from council. •If the council wishes to discuss this at a study session, then staff will schedule topic for an upcoming study session agenda. •If the council does not see the need to discuss the topic in a study session, then staff proposes to begin the formal amendment process and will schedule a public hearing at the planning commission. Policy consideration: This item is f ifth on the city council’s list of priority study session discussion topics. Please inform staff of questions or comments you may have. Summary: The city council added a review of home occupations as a priority discussion topic in 2020. Also, planning commission had inclu ded it in its 2020 work plan. Staff prepared an amendment based on comments received from a November 4, 2020 planning commission study session discussion that also addressed the questions raised by city council when the topic was introduced for future discussion. The draft ordinance was presented to the planning commission in study session on December 2, 2020. The planning commission agreed to forward the draft to the city council for discussion, questions or comments before advancing the item further. A de tailed description of the proposed amendment is attached in the discussion. The following summarizes the changes: •Allow barbers/hairdressers. •Allow one outside employee that does not reside on the property to work at a home occupation. •Allow home occupations to be conducted in accessory buildings, including accessory dwelling units (ADU). •Allow the size of a home occupation to be equal to 25% of the floor area of a dwelling (currently they are limited to 10%). •Allow residents of ADU to conduct home occupations in the ADU. Financial or budget considerations: Not at this time. Strategic priority consideration: St. Louis Park is committed to providing a broad range of housing and neighborhood oriented development. Supporting documents: Discussion; Proposed amendment; Nov. 4, 2020 planning commission minutes; Dec. 2, 2020 planning commission minutes; June 10, 2019 council study session minutes Prepared by: Gary Morrison, assistant zoning administrator Reviewed by: Sean Walther, planning and zoning supervisor Karen Barton, community development director Approve d by: Tom Harmening, city manager Study session meeting of January 11, 2021 (Item No. 5) Page 2 Title: Home -based businesses Discussion Background: A review of the home occupation ordinance was added as a priority discussion by the council. Additionally, the planning commission had included the topic in its 2020 work plan. The council briefly discussed the home occupation regulations on June 10, 2019 in conjunction with a discussion about accessory dwelling units. The planning commission continued the discussion on November 4, 2020 and again on December 2, 2020. The attached draft is the result of the planning commission discussion. This report is presented to the council prior to beginning the formal process to adopt the ordinance, to ascertain whether the council would prefer to discuss the matter in a council study session before beginning the amendment process. In addition to the amendments discussed below, staff also proposes moving the home occupation regulations from each of the residential zoning districts to a new subsection in the general residential district regulations section of the zoning ordinance. This section contains regulations that apply to all residential districts, including rules for accessory structures, accessory dwelling units, vehicle parking and other miscellaneous residential regulations. Consolidating all the rules to one section would reduce redundancy in the code and would be easier to ensure consistency of the regulations. The drafted amendment includes: •A llowing barbers/hairdressers as a home occupation. Currently, they are prohibited as home occupations. •A llow one outside employee to work at the property where the home occupation is based. The employee may work at a home occupation conducted by the occupant of either the principal or accessory dwelling. The draft does not allow an employee at both home occupations for those instances when a home occupation is conducted by the occupants of both the principal dwelling and accessory dwelling. •Allow home occupations to be conducted in accessory buildings. The draft propose s to allow the use of accessory buildings with the condition that the property meets parking requirements. The condition is necessary to preserve garage parking spaces if those spaces are needed to meet the off-street parking minimum requirements. Therefore, a request to utilize a garage for a home occupation would be denied if the only parking spaces available for the residence is in the front yard or the street. Utilizing the garage would be allowed if the homeowner provides two parking spaces in the side or backyard. •Allow a home occupation to occupy more than 10% of the home. Section 36-115(e) defines an accessory use as a secondary use that occupies less than 25% of the building area. To be consistent with this provision, staff proposes to increase the maximum allowed floor area for home occupations from 10% to 25%. The size limit for a home occupation conducted by the occupant of the principal dwelling will be based on the size of the principal dwelling. Home occupations based out of an accessory dwelling unit will be based on the size of the accessory dwelling unit. Study session meeting of January 11, 2021 (Item No. 5) Page 3 Title: Home -based businesses •Allow residents of accessory dwelling units to conduct home occupations. The draft allows the occupants of both the principal dwelling and the ADU to each conduct their own home occupations. As drafted, home occupations conducted by the occupants of the ADU are limited to 25% of the ADU. Furthermore, the draft limits the number of outside employees that do not reside on the property to no more than one outside employee per lot. The home occupation conducted in the ADU cannot have an employee if there is already a home occupation with an outside employee conducted in the principal dwelling and vice versa. •Allow equipment that is not typically present in a residential household, provided it has no negative impacts on adjacent residential properties, is small enough in scale so as to not infringe on the residential character of the home, and the equipment does not result in undue impacts to public infrastructure. The draft code proposes to eliminate the provision limiting equipment to that which is normally found in a home. Instead, the ordinance relies on the other provision that prohibits nuisance impacts such as noise, smells, vibrations, etc. The equipment is permitted if its use is not perceptible to adjacent properties. Home occupations conducted in apartments, condominiums, townhomes or other dwelling units sharing a common wall will have a harder time meeting this requirement, and therefore, will be subject to greater limitations as to the equipment allowed. Staff further considered the planning commission’s interest in allowing pet walking and grooming activities if the number of pets at the home does not exceed the number currently allowed for a residence. The city currently allows up to three adult dogs. Any number of puppies are allowed up to four months of age. There are no limits on cats, rabbits or other domesticated pets. Staff has concerns about allowing animal handling and professional grooming as a home occupation. Professional grooming and animal handling facilities involve handling animals with varying dispositions. Including this use and added risk into a residential setting puts neighbors at risk that may encounter the animal while it is outside. Additionally, dogs in new settings are very likely to bark at noises and people in an unfamiliar area, predictably resulting in nuisance situations. The planning commission agreed not to allow this use. Therefore, the current draft continues to prohibit animal handling. Next steps: If the council wishes to discuss this amendment in study session, the n staff will schedule the discussion for an upcoming study session agenda. Otherwise, staff propose to initiate the process to adopt the amendment as drafted by scheduling a public hearing at the planning commission. Study session meeting of January 11, 2021 (Item No. 5) Page 4 Title: Home -based businesses Proposed amendment Home occupations are described as commercial uses in the following section 36-142.(d)(14): Home occupation is an occupation, profession or activity conducted in a dwelling unit, which is clearly an incidental and subordinate use to the residential use and which does not alter the exterior of the property or affect the residential character of the neighborhood. Home Occupations Home occupations complying with all of the following conditions: a.A registration of land use is required for any home occupation established after July 12, 2019, that has customers or students coming to the site. b.The home occupation and structure housing the home occupation meets all applicable fire and building codes, as well as any other city, county, state, or federal regulations. c.The home occupation is clearly incidental and subordinate to the residential use of the property and does not change the character of the property. d.The floor area of the home occupation cannot exceed 25% of the total floor area of the principal dwelling unit. If the home occupation is conducted by the occupant of an accessory dwelling unit, then it is limited to 25% of the floor area of the accessory dwelling unit.Space within the dwelling devoted to the home occupation does not exceed one room or ten percent of the floor area, whichever is greater. e.The No portion of the home occupation may be is conducted within any attached or detached accessory building if the property complies with the minimum required parking for the property. f.Operation of the home occupation is not apparent from the public right-of-way. g.Only equipment, machinery, and materials which are normally found in the home are used in the conduct of the occupation. h.All material or equipment is stored within an enclosed structure. i.The home occupation does not produce nuisance noise, odors, smoke, heat, glare, vibration, or electrical interference beyond the residential lot occupied by the home occupation. j.No person is employed at the residence One person who does not legally reside at the property in the home may be employed at a home occupation occurring in either the principal dwelling or the accessory dwelling unit. k.Persons do not come to the location of the home occupation to be dispatched to other locations, or to pick-up or drop-off equipment, materials, or supplies. l.Sale of products related to the home occupation is allowed with the following conditions: i.Products are shipped to and from the premises; or ii. Product sales occur off -site at a permissible location; or iii.Customers visit the premises by appointment only; or iv.Products are sold on the premises at garage sales as regulated by this chapter. m.No more than one non-illuminated wall sign up to two square feet in area is used to identify the home occupation. n.The home occupation does not include any of the following uses: auto body/painting, motor vehicle sales, motor vehicle service and repair, small engine repair, massage, medical/dental office, animal handling, beauty shop and barbershop, restaurant, firearm sales, currency exchange, payday loan agency, sexually-oriented business or high-impact sexually oriented business. Study session meeting of January 11, 2021 (Item No. 5) Page 5 Title: Home -based businesses EXCERPT OF OFFICIAL MINUTES PLANNING COMMISSION ST. LOUIS PARK, MINNESOTA NOVEMBER 4, 2020 – 6:00 p.m. COUNCIL CHAMBERS M EMBERS PRESENT: Jim Beneke, Imran Dagane (arrived 6:25 p.m.), Matt Eckholm, Jessica Kraft, Tom Weber (arrived 6:30 p.m.) M EMBERS ABSENT: Courtney Erwin STAFF PRESENT: Jennifer Monson, Gary Morrison, Sean Walther, Mara Hynek STUDY SESSION The study session commenced at 6:25 p.m. 2.Home occupations Mr. Morrison presented the report. He noted this is a priority discussion topic in the 2020 work plan for the commission and for the city council. He noted several previously raised topics for discussion lifting the prohibition on barbers/hairdressers as a home occupation allowing one or more outside employees, allowing home occupations in accessory buildings, allowing them occupy more than 10% of the principal building, and allowing residents of ADUs to conduct home occupations in the ADU they occupy. Mr. Morrison stated discussion about the uses and character of the residential neighborhood should also be discussed to provide context for other decisions. Commissioner Weber asked if the registration of land use requirement applies to people working from home now during the pandemic, such as home offices. Mr. Walther stated the registration of land use is required only when there are customers or students that come to the home. It does not apply to a home office if people living there are using the office. Commissioner Eckholm asked about machinery and/or equipment uses within the home. He stated this may need to be re-worded to be more permissive. Commissioner Weber noted the animal handling occupation and asked if this would be allowed as long as they stay within the city’s allowable three animal/pet limit. Mr. Morrison stated this can be discussed further. Commissioner Weber stated there would seem to be many examples of people who would be surprised they are breaking city rules with their home occupation. He stated Study session meeting of January 11, 2021 (Item No. 5) Page 6 Title: Home -based businesses he thinks about this being a first interaction with the city and the impression that would leave for them. Mr. Morrison stated staff typically will not contact the person unless a city staff person witnesses the violation. Mr. Walth er added, in practice, staff is not out doing house calls and aggressively searching for these types of violations but noted the city does regularly receive complaints from neighbors about home occupations that run afoul of the rules. A common one is car repair service; there are multiple cars being repaired or stored outside on a property in various states of repair. Commissioner Weber asked if the city has specified the language in the ADU ordinance that says the actual ADU is actually used primarily or only for the home occupation. Mr. Walther stated this was one of the reasons raised by city council for having this discussion. He stated right now it is a bit grey in this area as to how to interpret the code, so more clarity will need to come of this. Commissioner Beneke stated he is unclear as to what he would want to do with the ADU/home occupation, and this warrants more discussion. Chair Kraft stated she is in alignment with most of what has been discussed. She would have concerns with noises or odors but has no concerns about barber/beauty salons, daycares, or a 3D printer in a house. Commissioner Weber would also support some research into barber/beauty salons, as it serves a path of entry into business ownership, especially for communities that may not have access to commercial space. Commissioner Beneke added he agrees with this idea in general. Commissioner Dagane agreed with the comments made in the discussion as well and would have concerns also with what kind of business it was and traffic issues. Mr. Walther stated this topic will be researched further and brought to the council for input before the discussions are concluded with the commission. This will allow the commission to discuss after council and incorporate council comments in their deliberation. The meeting was adjourned at 8:05 p.m. Study session meeting of January 11, 2021 (Item No. 5) Page 7 Title: Home -based businesses EXCERPT OF UNOFFICIAL MINUTES PLANNING COMMISSION ST. LOUIS PARK, MINNESOTA Dec. 2, 2020 – 6:00 p.m. COUNCIL CHAMBERS M EMBERS PRESENT: Imran Dagane, Matt Eckholm, Courtney Erwin, Jessica Kraft, Tom Weber M EMBERS ABSENT: Jim Beneke STAFF PRESENT: Gary Morrison, Sean Walther STUDY SESSION The study session commenced at 6:16 p.m. 1.Home Occupations Ordinance G ary Morrison, assistant zoning administrator, provided the report. He noted proposed changes such as allowing land uses the commission discussed at the last meeting, including barbers and hairdressers, allowing one outside employee, allowing home occupations in accessory buildings, allowing the home occupation to occupy more than 10% of the dwelling area, and allowing residents of accessory dwelling units to have home occupations. He also noted changes proposed to the conditions noted in the staff report. Commissioner Weber asked about the restaurant example and that was okay because the occupation was not happening within a residence. Mr. Morrison stated the ordinance allows for office space and catering to a point, but not restaurant service to customers on site. Commissioner Erwin asked related to Covid and if the wording is acceptable for licensed barber or beauticians within a residential area and as a home occupation. Mr. Morrison stated that barbers and beauticians are required to be licensed by the city and state, and if they pass this licensing requirement, they are allowed within a home occupation. Commissioner Weber asked what the reason is for banning a massage business. Mr. Morrison stated massage, medical and dental typically occur in a more professional office setting in the city for the protection of the clients. Chair Kraft stated with Covid there seems to be more mobile businesses and if that is related to home occupations or handled differently. Mr. Morrison stated it is the same if the office portion is located within the home, however with trucks or van, they must meet size limitations to be parked in a home driveway. Mr. Walther added mobile uses are also regulated, such as a food truck must receive permits. Additionally, mobile services that go to another person’s home to conduct services and leave Study session meeting of January 11, 2021 (Item No. 5) Page 8 Title: Home -based businesses within a certain timeframe are treated differently than a home occupation where the vehicle is parked or stored. Commissioner Eckholm stated the draft reflects the commissions feelings on the ordinance and is a marked improvement. Mr. Walther stated the proposed ordinance will be shared with council as a written report before staff initiates the formal public process. The meeting was adjourned at 6:52 p.m. Meeting: Study session Meeting date: January 11, 2021 Written report: 6 Executive summary Title: 2021 legislative issues and priorities Recommended action: The purpose of this report is to provide council with the list of legislative issues and priorities for the 2021 legislative session . Policy consideration: Does the council agree with the issues included in the legislative priorities document? Summary: The state legislature reconv ened the 92nd session on Tuesday, January 5, 2021. As in previous years, the city council and staff have prepared a list of legislative issues for the council to review and adopt. The city council reviewed a draft of the legislative priorities on November 9, 2020. The attached top priorities will be shared with the city’s state, county and met-council representatives. The document attached with the large and detailed list of priorities will be used by staff and the city lobbyist. As the 2021 legislative session progresses, additional issues may arise that can be addressed as necessary. On Tuesday, January 19, 2021 the council will meet with Senator Ron Latz, Representative Cheryl Youakim, Representative Ryan Winkler, Hennepin County Commissioner Marion Greene and Metropolitan Council representative Lynnea Atlas-Ingebretson to discuss the 2021 legislative priorities . Financial or budget considerations: Funding for lobbyists is included in the budget. Strategic priority consideration: • St. Louis Park is committed to being a leader in racial equity and inclusion in order to create a more just and inclusive community for all. • St. Louis Park is committed to continue to lead in environmental stewardship. • St. Louis Park is committed to providing a broad range of housing and neighborhood oriented development. • St. Louis Park is committed to providing a variety of options for people to make their way around the city comfortably, safely and reliably. • St. Louis Park is committed to creating opportunities to build social capital through community engagement. Supporting documents: Discussion 2021 top legislative priorities 2021 legislative issues Prepared by: Maria Solano, senior management analyst Approve d by: Tom Harmening, city manager Study session meeting of January 11, 2021 (Item No. 6 ) Page 2 Title: 2021 legislative issues and priorities Discussion Background: The state legislature reconvened on Tuesday, January 5, 2021. Below are additional resources for staff and city council. Additional Resources: League of Minnesota Cities LMC Legislative Action Center LMC Legislative Priorities Policy Committees Metro Cities Policy committees City of St. Louis Park 2021 Legislative Priorities The St. Louis Park city council asks state, county and met -council representatives to advance the city’s top two legislative categories of affordable housing and climate action . Listed below are the city’s legislative priorities for 2021. Affordable housing o Production o Establish dedicated revenue for affordable housing o Allow an affordable housing fee on ne w development o Establish a TOD affordable housing fund and financial resources o Preservation o *Allow pooled TIF to be deposited in LHTF’s for affordable housing o Establish a rental rehab loan program for small to medium size developments to preserve NOAH multi-family residential rental properties o Establish a dedicated revenue source for Local Housing Trust Funds (LHTF) o Establish a tax credit contribution fund o Maintain local regulatory authority for fee-for -service building inspections to ensure public safety and verify compliance o Protections o 90-day tenant prot ection period pr ohibiting rent increases and non- renewals following the transfer of (NOAH) property ownership o Expand the eligibility for discretionary and mandatory expungements for eviction case court files o Require tenant notice of grounds for eviction before legal action o Advance renter initiatives such as lease fairness and revamp standards on the minimum heat code, equal emergency and non-emergency court fees and repair rules/emergency tenant remedies C limate action o *Special assessment tool for energy/sustainability improvements o Statewide adoption of similar goals to the St. Louis Park Climate Action Plan o 100% renewable energy by 2030 o Carbon neutral by 2040 o Adopt an Advanced State Energy C ode and/or allow for local adoption of more efficient building standards o Support the current state building and energy code development process o Support efforts to encourage zero emissions vehicle/low emissions vehicles (ZEV/LEV) o Funding for electric vehicle (EV) infrastructure o Support climate change efforts such as the MN Green New Deal bill M ultimodal Transportation o County partnership on: o R econstruction of Texas Avenue/ Minnetonka Blvd intersection o Funding for reconstruction of CSAH 25 o Establish stable statewide transportation funding o Support stable and growing revenue sources to fund regional transit providers o Regional planning on automated vehicles General o Preserve local control o Oppose the establishment of levy limits o Oppose reductions to local government aid o Advocate that a percentage of tax revenue g enerated by recreational marijuana (if appr oved by the legislature ) be allocated t o cities to cover law enforcement and mental health o Maintain and increase funding for the pathways to policing program and create pa thways to firefighting program o Support a statewide system to track race data for police traffic stops Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 3 [1] Table of Contents Community Development Issues ..............................................................................................3 Establish a TOD Affordable Housing Fund ................................................................................... 3 Local Housing Trust Funds (LHTF) .............................................................................................. 3 Amend State Statute 471.9996 Rent Control Prohibited to Allow for a 90 Day Tenant Protection Period Following the Transfer of (NOAH) Property Ownership................................................................. 3 Eviction expungement reform .................................................................................................. 3 Renter Initiatives (Request directed to State Legislature) .............................................................. 4 Tenant notice of grounds for eviction before legal action.............................................................. 5 Establish revenue resource for affordable housing....................................................................... 5 Tax Credit Contribution Fund .................................................................................................... 5 Rental Rehab Loan Program for small to medium size developments in seven county metropolitan area ............................................................................................................................................ 6 Housing construction - Limiting Local Regulatory Authority ........................................................... 6 Affordable housing fee on new development .............................................................................. 6 Maintain Local establishment of appropriate fee-for -service programs........................................... 7 Use of Pooled TIF for affordable housing .................................................................................... 7 Safeguard public code administration employees ........................................................................ 8 Other Community Development Issues.....................................................................................8 TIF District Statutory Modifications ........................................................................................... 8 DEED Program Funding ............................................................................................................ 9 Special Service Districts Statutory Authority.............................................................................. 10 Building and Energy Issues ....................................................................................................10 Environment and Sustainability (Climate Action Plan)................................................................. 10 Advanced State Energy Code (Requested to State Legislature) ..................................................... 11 Energy Assessment Option (Requested to State Legislature)........................................................ 11 Transportation Issues.............................................................................................................12 Redesign and Reconstruction of CSAH 25 ................................................................................. 12 Texas Avenue/ Minnetonka Blvd intersection reconstruction ...................................................... 13 Southwest LRT...................................................................................................................... 13 Transportation funding .......................................................................................................... 14 Transit financing ................................................................................................................... 14 Automated Vehicles .............................................................................................................. 15 Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 4 [2] Public Safety Issues...............................................................................................................15 Police Trainee/Non-traditional Pathway to Policing Program....................................................... 15 Railway Safety of Hazardous Materials and Oil Train Operations .................................................. 15 Local Control of Emergency Medical Services ............................................................................ 16 Oppose statutory prohibition on residential fire sprinklers .......................................................... 17 Oppose expansion of legal fireworks........................................................................................ 17 Continued Health Insurance Coverage for Disabled Public Safety Officers ..................................... 17 Permit to Purchase Firearms/Permit to Carry ............................................................................ 18 Protecting the Privacy and Safety of Public Officials and Peace Officers ........................................ 18 Criminal Background Checks................................................................................................... 19 Investments for Mandated law enforcement training................................................................. 19 Gun Violence Protective Orders (GVPOS).................................................................................. 19 State wide data collection on race and/or ethnicity for stopped motorist’s ................................... 19 General Issues.......................................................................................................................20 Local Control ........................................................................................................................ 20 Levy Limits ........................................................................................................................... 20 Local Government Aid ........................................................................................................... 20 Emerald Ash Borer ................................................................................................................ 21 Legislative-Citizen Commission on Minnesota Resources ............................................................ 21 Records Retention Related to Correspondence ......................................................................... 21 Telecommunications and Information Technology ..................................................................... 22 Cable Franchising Authority.................................................................................................... 22 Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 5 [3] City of St. Louis Park 2021 Legislative Issues Community Development Issues Establish a TOD Affordable Housing Fund (Request directed to State Leg./Hennepin Co) Issue: Efforts are being made to develop a corridor-wide housing strategy for the SWLRT Corridor to provid e a full range of housing options specifically within a half -mile of the station areas. The fundamental issue with respect to the traditional approaches to infill/redevelopment and mixed - income housing production/preservation, is an absence of funds. Position: The city supports the creation of a TOD Affordable Housing Fund and requests that Hennepin County and the State provide a financial resource to be used to support the preservation and creation of affordable housing along the SWLRT corridor. Local Housing Trust Funds (LHTF) (Request directed to State Legislature) Issue: The legislature passed language that enables cities, counties or regions to set up and resource LHTFs. Local affordable housing agencies continue to work on finding consistent funding source s and methods to incentivize communities to take advantage of this locally controlled tool. Position: The city supports legislation that establishes a dedicated revenue source for LHTFs, encourages local jurisdictions, creates a state match and provides technical assistance dollars to communities to set up their LHTF. Amend State Statute 471.9996 Rent Control Prohibited to Allow for a 90 Day Tenant Protection Period Following the Transfer of (NOAH) Property Ownership (Request directed to State Legislature) Issue: Currently state statute prohibits any local adoption of an ordinance to control rents on private residential properties unless the ordinance is approved in a general election. Investment buyers have been purchasing NOAH multi-family residential properties, rehabbing properties and increasing rents. In some cases, new owners have non-renewed the leases of existing tenants with minimal notice and/or implemented substantial rent increases with minimal notice. A 90-day period that would prohibit rent increases and non-renewals would allow time for existing resid ents in these situations to seek alternative housing. Position: The city supports legislation that would allow for a 90-day tenant protection period following ownership transfer of a NOAH multi-family residential property. Eviction expungement reform (Request directed to State Legislature) Issue: Records of unlawful detainer filings remain on a tenant’s public record regardless whether the matter was settled or dismissed prior to the court hearing or if the tenant prevails at the hearing. In these cases, the eviction record is not a reasonable predictor of future tenant behavior and should be Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 6 [4] expunged since the existence of this record impedes the ability of the renter to secure suitable rental housing in the future. A bill is bein g submitted that would allow for expungement of the eviction record in the cases noted above. In addition, the courts could grant an expungement if an eviction case is three years old and the court finds that the court case is no longer a reasonable predictor of future tenant behavior and the expungement is in the interest of justice and those interests are not outweighed by the public’s interest in knowing about the record. Bill No. being submitted – HF-1972 Position: The city supports legislation that would expand the eligibility for discretionary and mandatory expungements for eviction case court files. Renter Initiatives (Request directed to State Legislature) Issue: With the continued low vacancy rates for rental housing and the scarcity of affordable housing units, it is important the state address some misleading and harmful leasing practices. Listed below are several bills that are proposed to be introduced this year by HomeLine. HomeLine is seeking an endorsement from Homes for All, a statewide housing coalition that advances shared policies initiatives that lead to housing stability for all Minnesotans. These include some changes to how court actions for serious/emergency repairs work, the establishment of a statewide minimum heating requirement (SLP already has an ordinance) and changes to some misleading and harmful leasing practices. These are among some of the most common issues that renters face. Lease Fairness ● Non -refundable fees for non-optional services should be prohibited. Administrative costs must be incorporated in the tenant’s rent so they understand how much they’ll be paying each month before they enter into a lease. Prohibited fees could include administrative fees, lease processing fees, carpet-cleaning fees, etc. ● Tenants should be entitled to privacy: Unless an emergency, a tenant should have a minimum of 24 hours -notice from the landlord prior to them entering the tenant’s home. In such cases, the landlord should only be able to enter between 8 a.m. and 6 p.m. and must give a four-hour window of time for entry. Notice should be required even if the tenant has asked for repairs. If this right is violated, tenants should be able to sue during or after a tenancy for a meaningful penalty. ● Tenants should be able to break their lease in some cases of infirmity: Renters who have a physician -certified medical condition, illness, or disability that hinders their ability to remain in their current housing situation should be able to end their lease with a 2-month notice if they must move to a medically -assisted or accessible housing unit. The tenant must have documentation that they will be moving to an appropriate facility. Heat and Repairs: ● Minnesota should have a statewide minimum heat code. If the tenant does not control the heat, from October 1 to April 30 the heating shall be maintained at 68 degrees Fahrenheit. ● Emergency and non-emergency issue court fees should be equal. Currently, it costs roughly $70 to file a Rent Escrow – set by law at the same price as a Conciliation Court (small claims court) filing fee. However, if a tenant has a really serious emergency, like no heat in the winter or being locked out by the landlord, the tenant has to pay the full filing court filing fee of around Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 7 [5] $300 (ETRA / Emergency Tenant Remedies Action). An emergency should not cost more than a non-emergency. ● Minnesota should revamp its apartment repair rules/ Emergency Tenant Remedies Action expansion: Currently, Minnesota law lists only the following as emergency issues : no running water, hot water, heat, electricity, sanitary facilities, and other essential services. "Essential services" serves as a catch-all, but it's hard to know what else fits there. This law should include, but not be limited to, the following emergencies: ■ no working refrigerator ■ no working air conditioning (This would only apply if the rental was advertised as having air conditioning included.) ■ Notice of Intent to Condemn for unsafe/unsanitary conditions ■ non-working elevators ■ infestations Tenant notice of grounds for eviction before legal action (Request to the State Legislature) Issue: Currently, state statute does not require a rental property owner to provide a notice to tenants prior to filing a legal eviction action for material breach of the lease. MN’s unlawful detainer process is swift and a tenant can lose their housing within a few weeks of the filing. Requiring a notice be provided to tenants prior to filing an eviction action will ensure that residents are informed and aware of the consequences of unresolved financial obligations or other breaches of the lease and provide an opportunity to remedy the breach prior to filing the action. Position: The city supports legislation that would require that the tenant be notified prior to the landlord bringing an eviction action alleging a material breach of the lease Establish revenue resource for affordable housing (Request directed to State Legislature) Issue: The need for affordable housing in the State has grown to crisis proportion, requiring a larger response than local jurisdictions can provide on their own. Increased State level funding is critical to enable local jurisdictions to enact programs to facilitate the creation and preservation of affordable housing, including subsidized and naturally occurring affordable housing. Position: The City supports establishment of a financing source to fund local and regional programs to facilitate the creation and preservation of affordable housing. Tax Credit Contribution Fund (Request directed to State Legislature) Issue: The private market is not supplying housing that is affordable to Minnesota’s low-income households. A public private partnership could help ensure an adequate supply of housing. The Minnesota Tax Credit Contribution Fund incentivizes private investment and promotes community and economic development. This fund is being modeled after North Dakota’s Housing Incentive Fund. Since its inception in 2011, North Dakota's HIF has leveraged roughly $5 for every $1 invested, creating more Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 8 [6] than 2,500 units across th e state. Minnesota communities of all sizes would benefit from this simple, effective tool. The program is capitalized by contributions from taxpayers that have state income or corporate/insurance premium tax liabilities. In exchange for contributions to affordable housing, participating taxpayers receive credit against their state income tax liability equal to their contribution to a specific development or the general loan pool. Participation in the program is simple, and the credit is flexible, easy to use statewide, leverages significant private equity, and boosts local businesses. Position: St. Louis Park strongly supports and encourages affordable housing. The city supports the establishment of a tool to incentivize private investment and promote community and economic development. The Minnesota Tax Credit Contribution Fund is about neighbors helping neighbors create housing opportunities and helping businesses and communities thrive. Rental Rehab Loan Program for small to medium size developments in seven county metropolitan area (Request directed at the State Legislature) Issue: Naturally occurring affordable housing (NOAH) is the largest resource of affordable housing in the metro area. These multi-family residential rental developments which typically have limited amenities are at risk of losing their affordability as investors purchase the properties, renovate and add amenities and increase rents. As an incentive for current NOAH properties owners to retain the affordability of their properties, a multi-family rehab loan fund should be established to provide funding for rehab and capit al investment in the development in exchange for establishing rent restrictions. Position: St. Louis Park strongly supports and encourages affordable housing. The city supports the establishment of a housing rehab loan program to facilitate the preservation of NOAH multi-family residential rental properties and encourage owners to retain the affordability of their developments. Housing construction - Limiting Local Regulatory Authority (Request directed to State Legislature) Issue: Recent discussions on affordable housing solutions includes agencies advocating for housing programs for primarily multiple family developments, and local home builders pursuing reduced regulatory authority by the state and cities. Last year, the Builders Association of the Twin Cities working through a newly created branch organization called Housing First MN, worked toward a bill that was defeated. Requiring new construction codes which could increase cost to receive legislative committee approval before being adopted, potentially halting progress in public safety and energy conservation standards. Additionally, these groups proposed restricting or eliminating local land use standards developed by communities for livability. Position: Although St. Louis Park strongly supports and encourages affordable housing, minimum code requirements for energy conservation and building safety should not be compromised on the concept of reducing construction costs to builders. In addition, local land use and zoning standards for establishing quality of life standards in each community should not be limited by legislative action Affordable housing fee on new development (Request directed to State Legislature) Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 9 [7] Issue: There is an increasing need of affordable housing across the state. Additional funds are needed in order to create and maintain affordable housing units within the city. An affordable housing fee on new development would help increase funds for future housing projects and initiatives. Position: The city supports legislation that would allow for the collection of an affordable housing fee on new development. Maintain Local establishment of appropriate fee -for-service programs (Request directed to State Legislature) Issue: Call for affordable housing by construction industry is mistaking codes and fees to be the cause of raising home values - not the rapidly increasing price of building materials and construction labor in a free market economy. Position: Maintain a consistent minimum standard for building safety, longevity, and energy conservation, and allow local government units to continue with fee-for-service programs as currently outlined in statute (i.e. reasonable and justifiable). Use of Pooled TIF for affordable housing (Request to the State Legislature) Issue: Currently, state statute allows for the pooling of tax increment financing to be utilized for affordable housing within the defined redevelopment area of the city. However, the pooled TIF must be maintained in a separate fund with ongoing annual reporting requirements. Allowing cities with established Local Housing Trust Funds or Affordable Housing Trust Funds (LHTF/AHTF) to deposit the pooled TIF in those funds will allow for greater flexibility in the use of the pooled TIF for qualified costs to facilitate the construction and rehabilitation of affordable housing while alleviating the administrative burden of annual reporting. Additionally, pooled TIF from districts other than Housing Districts (i.e., Redevelopment Districts) cannot be used for affordable ownership housing. This severely restricts the funding available to assist lower-income households in homeownership. Position: The city supports legislation th at would allo w the city to deposit pooled TIF for affordable housing in the city’s affordable housing trust fund and allow for pooled TIF from non-housing districts to be used for affordable homeownership programs, as well as affordable rental projects. Maintain 4D program (Request directed to State Legislature) Issue: Interest has been expressed to expand the 4D property tax discount program to increase the tax reduction of taxes paid by participating multi-family rental properties. Cities with a significant number of eligible properties may be unduly negatively impacted by an increase to the property tax reduction. Position: The city supports an evaluation of the impact that expanding the tax benefit/reduction of the program would have on communities. Support state funding for programs that would assist in avoiding foreclosure, improve homeownership rates and reduce racial disparities through homeownership programs (Request directed to the State Legislature) Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 10 [8] Issue: BIPOC and low-income communities have historically lower rates of homeownership. Homeownership is a proven effective means to aid households in wealth-building. More funding is needed to assist BIPOC and low-income households in achieving and maintaining homeownership. Position: The city supports funding for programs to assist BIPOC and low-income households in improving homeownership rates, reducing racial disparities through homeownership programs, and avoiding foreclosure. Statewide prohibition on discriminating against renters receiving rental assistance (Request directed to the State Legislature) Issue: Rental property owners can legally refuse to rent to people based solely on the source of income to pay their rent, leaving many households that receive various types of rental assistance unable to find housing. Position: The city supports a statewide prohibition on discrimination against renters receiving rental assistance. Safeguard public code administration employees (Request directed to State Legislature) Issue: As public safety regulators, inspectors often face hostility from a few public members. A no tolerance position for abusive behavior should be adopted. Assaults and murder have occurred on code officials in the normal course of performing their duties for a local government unit. Position: Support Minnesota League of Cities SD-29, Assaults on Code Enforcement Officials. The change would move assault charges from the current fifth degree, or misdemeanor, to a more stringent fourth degree, a gross misdemeanor, by expanding the public employees with mandated duties statute to include code enforcement officials. Other Community Development Issues Small business assistance during COVID (Request directed to State Legislature) Issue: Small businesses across Minnesota are struggling with the adverse health and financial impacts resulting from COVID-19. Despite recent federal, state and local assistance programs, additional funding is much needed to assist businesses through the health crisis. These businesses, which are both the economic engine of the state and the bedrock of their communities, are vulnerable to significant closures if further actions are not taken. Position: The City supports continuing financial relief programs (such as grants and low interest loans to help sustain the state’s small businesses until the global health crisis has been brought under control. Additional assistance should also be considered for the state’s self -employed and sole proprietor entrepreneurs. TIF District Statutory Modifications (Request directed to State Legislature) Issue: Tax Increment Financing (TIF) remains the most viable tool for local economic development and community reinvestment efforts. TIF is a method local governments use to pay for the costs of Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 11 [9] qualifying improvements necessary to create new investment, redevelopment, or publicly-assisted housing. The financing of the qualifying improvements is paid from the increased property taxes generated from the new development, redevelopment, or housing that would not occur “but for” such assistance. There are steps that the state could take that would enhance the effectiveness of TIF, leverage additional private investment and create more jobs and tax base in communities . The current types of State -authorized TIF districts lack flexibility and do not adequately address the varied and unique redevelopment situations found in urban communities. Currently, the Minnesota TIF Act requires more than 50% of the buildings in a project area must be found to be substandard to qualify as a Redevelopment TIF District. In redevelopment situations involving only a small number of parcels, this can be an insurmountable standard to meet thus preventing new investment from occurring. Position: The City supports greater flexibility and the inclusion of additional uses within current TIF districts. • In particular, the city supports a minor modification of the Redevelopment TIF District statute to require that 50% of the buildings within project areas must be found to be substandard. • The city supports the extension of the 5-year rule to 10 years for redevelopment and renovation and renewal districts. • To spur additional development, the city supports expanding authority to allow for the establishment of Economic Development TIF Districts for assisting with commercial project development for the purpose of retention and expansion of existing businesses and the attraction of new business to the state to create and retain jobs. • The city further supports the establishment of Transit Oriented TIF Districts within one-half mile of light rail corridors and one mile from light rail corridor train stations for the purposes of promoting economic development, redeveloping blighted areas, and the development of housing near light rail corridors. Eligible expenditures within the district include but are not limited to (1) the city's or authority’s share of the costs necessary to provide for the construction of any southwest light rail transit station and related infrastructure, including but not limited to parking facilities, including structured parking, pedestrian overpasses, pedestrian connections, and walkways or trails; (2) infrastructure and roadway improvements, including but not limited to sanitary sewer, water, storm sewer and utility improvements; (3) land acquisition costs; (4) costs related to e nvironmental remediation, soil correction, demolition, and relocation; (5) site improvement costs; (6) costs incurred with respect to the development of or rehabilitation of housing; and (7) related administrative costs. Additionally, if two or more cities or authorities propose a joint development or adjacent developments, the cities or authorities would be allowed to expend up to 25% of the total revenue derived from tax increments generated from such a tax increment district to pay for the eligible expenditures of another tax increment district located outside the city’s corporate limits DEED Program Funding (Request directed to State Legislature) Issue: The Department of Employment & Economic Development (DEED) is critically important in the support of communities and local economic development initiatives. DEED manages several programs utilized by the city that have positively impacted St. Louis Park. Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 12 [10] Position: St. Louis Park supports the continued annual funding of DEED programs at stable and sustainable levels. The City believes that continued funding of DEED programs at the same, or an increased level is vital to economic growth across Minnesota. The city supports legislative initiatives that strengthen funding levels for economic development programs administered by DEED and other state agencies such as Small Business Development Centers, the Minnesota Investment Fund, the Job Creation Fund, Contamination Cleanup and Investigation Grant Program, Redevelopment Grant Program, Transportation Economic Development Infrastructure Program and proposed new financing tools that support development along transit corridors. The city further supports the continuation of the Angel Tax Credit to spur the startup of high-technology businesses Minnesota communities rely on these programs to remain competitive with neighboring states in their efforts to bring jobs and tax base back to Minnesota. Special Service Districts Statutory Authority (Request directed to State Legislature) Issue: In 1988, cities were granted general authority under Minn. Stat. § 428A.01 to § 428A.101 to establish Special Service Districts. As currently written, only commercial properties can financially participate within Special Service Districts. This is challen ging for funding additional services within mixed -use project areas. The City of St. Louis Park has established six Special Service Districts, including multiple sections of Excelsior Boulevard. Providing infrastructure improvements and on-going maintenance at the LRT station areas will also be a need Position: The city supports the inclusion of multi-family housing developments as financial participants within Special Service Districts and the establishment of Special Service Districts around transit and LRT station areas. Building and Energy Issues Environment and Sustainability (Climate Action Plan) (Request directed to State Legislature, Met Council & Hennepin County) Issue: The city adopted a Climate Action Plan (CAP) on February 2018 with the ambitious goal of achieving carbon neutrality, having a net zero carbon footprint, by 2040. The Climate Action Plan outlines specific activities and goals the city will undertake to reduce greenhouse gas emissions. The plan includes seven mid-term goals by 2030 to keep the city on track. • Reduce energy consumption in large commercial buildings 30 percent • Reduce energy consumption in small- to mid -size commercial buildings 30 percent • Design and build all new construction to be net-zero energy • Reduce energy consumption in residential buildings 35 percent • Achieve 100 percent renewable electricity • Reduce vehicle emissions by 25 percent • Reduce solid waste 50 percent from business as usual Position: The city supports the statewide adoption of similar goals to those in the St. Louis Park Climate Action Plan and requests ongoing support to achieve these goals. The city supports legislation that Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 13 [11] helps climate action planning by reducing energy usage and greenhouse-gas emissions. In addition, the city supports legislation that provides state funding for energy conservation and renewable energy initiatives. Advanced State Energy Code (Requested to State Legislature) Issue: Reducing energy consumption and carbon emissions of buildings is a major component toward achieving the St. Louis Park Climate Action Plan, especially for larger commercial structures. Continuing to construct new buildings to the current MN State energy code is counterproductive as requirements are dated and allow for relatively high energy consumption. Future retrofitting of these buildings to reduce energy and carbon emissions will be costly and difficult. The cities of Bloomington, Edina, Minneapolis, St. Louis Park, St. Paul, and Rochester (Planning Team cities) began convening a series of meetings with about a dozen cities from across the state to discuss the topic of how to advance energy performance in new construction and major renovation buildings in Minnesota. This group is called the Cities Advanced Building Performance Work Group. St. Louis Park and St. Paul staff are representing the cities workgroup on the Minnesota Department of Commerce (Commerce) and the Minnesota Department of Labor and Industry (DLI) Building Efficiency Workg roup . The purpose is to explore potential policy solutions that will enable cities to voluntarily promote or otherwise ensure greater energy performance measures for commercial and multifamily residential buildings. Position: Support legislation to adopt developing a more advanced state energy code and/or allowing for local adoption of more efficient building standards. Energy Assessment Option (Requested to State Legislature) Issue: Communities engaged with meeting climate action plan goals are working collectively with homeowners, apartments, and businesses to save money on energy costs while reducing our carbon footprint. Education, partnerships, and incentive programs are currently being utilized to take positive steps in reaching for community goals. Providing the option of a locally administered assessment program to help fund the capital investments when requested by the property owner would be a helpful addition. This asse ssment option model has been in MN Statute and utilized successfully for over twenty years by some cities to assist business owners for the installation of fire sprinkler systems. A goal that benefits both property owner and the community, through lower insurance rates, protection of property, reducing life loss, and reduction of firefighting resources. Position: The city supports legislation that would allow the use of special assessments for assisting property owners in making energy saving improvements and installation of renewable energy systems in existing buildings. Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 14 [12] Transportation Issues Redesign and Reconstruction of CSAH 25 (Request directed to Hennepin County) Issue: The city and county have developed a long term vision to transform the CSAH 25 Corridor from the rural design through-route it is today to a multimodal urban boulevard with well-designed landscape architecture and place-making features. The goal is to transform this Hennepin County Road into an amenity rich, pedestrian/ bicycle friendly, transit oriented Boulevard, between Trunk Highway 100 and France Avenue. A clear long-term vision for CSAH 25 will serve to guide both public and private investment in this corridor. Already, the SWLRT Beltline station, park & ride and proposed Beltline Station Redevelopment project is beginning to transform the west end of this corridor. The Shoreham mixed -use project started the transformation at the east end, followed by Parkway 25 and the current Parkway Residences project continues the redevelopment pattern. The new concept for CSAH 25, which was developed in concert with Hennepin County, supports this change to a more urban place that provides safe , attractive access to the Beltline LRT station in St. Louis Park and the neighboring W. Lake Street LRT station in Minneapolis. Analysis: The transformation of CSAH 25 into an urban boulevard includes the following actions and considerations: • A commitment from Hennepin County, with involvement from Minneapolis, to changing the corridor. • CSAH 25 serves many important functions and is home to a surprising number of businesses, residents and property owners. All stakeholders should be informed and involved in the design processes. • Integration of the planned improvements associated with SWLRT between Beltline Boulevard and Lynn Avenue and the W. Lake Street multi-modal transportation plan into the vision for the corridor. • Strong connections to existing and planned bicycle routes, filling the existing gap in access to the Cedar Lake Trail from the north. • Providing space for pedestrians in the corridor and safe connections across CSAH 25 to get to destinations. This includes amenities and landscaping to create a place where people want to walk and spend time. • Addressing storm water drainage and treatment. • Consideration of the east end “triangle,” where Minnetonka Blvd, CSAH 25, France Avenue and W. Lake Street meet. This area presents both opportunities for gateway treatments for both Minneapolis and St Louis Park as well as operational challenges for the pedestrians, bicyclists and local businesses. • Consideration of a new name for the roadway that provides a positive identity while eliminating the currently existing address confusion. Just as CSAH 5 is also named Minnetonka Boulevard, CSAH 25 needs a street name around which an image and identity can be built. In the case of CSAH 25, there is added confusion because of its history of being originally part of MN Highway 7, a name that continues to be used by many. • Development of a funding and phasing plan. Transforming CSAH 25 will be a large project and will take time and significant resources to implement. New development in the corridor may be Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 15 [13] able to play a significant role in funding the transformation, but timing will be critical for that to happen. Position: We thank Hennepin County for their participation in the redesign process and request the County’s support and funding for the actual rehabilitation/ reconstruction of CSAH 25. Texas Avenue/ Minnetonka Blvd intersection reconstruction (Request directed to Hennepin Co.) Issue: Texas Avenue between Lake Street and Wayzata Boulevard is one of the few continuous north- to-south roadway connections in the City of St. Louis Park. The city has reconstructed the section of Texas Avenue from Lake Street to 400 feet south of Minnetonka Boulevard in 2017 and 2018. The new roadway includes bicycle, pedestrian and intersection improvements that have greatly increased the efficiency and safety in this segment of the corridor. The road project stopped short of the Minnetonka boulevard intersection. In 2016 and 2018 a bikeway was installed along Texas Avenue north of Minnetonka Boulevard. To complete the upgrade of the Texas Avenue corridor, we would like to partner with Hennepin County on the reconstruction of the intersection. The new intersection would include separate bicycle facilities, sidewalk improvements, better sightlines for drivers, signal replacement, and ADA upgrades. All things that are much needed at this location. Analysis: In order to extend the bicycle, pedestrian and roadway enhancements that were completed to the south and to the north of the Minnetonka Boulevard intersection the following items would need to be addressed. • Sidewalks: The sidewalks require updating to meet ADA requirements for pedestrian ramps, width, and clearance from obstructions. • Bike lanes: In 2018, the county enhanced the bike lanes on Minnetonka Boulevard. However, at the intersection, these lanes do not have adequate space. The same is true for the bikeway on Texas Avenue. Most bicycle related crashes occur at intersections, it is important to maintain the bikeway through the intersection to eliminate confusion for all users of the road. • Intersection modifications: the city has developed a layout for this intersection that will greatly improve the way it operates for all users. Eliminating sightlines issues, creating space for bicycles and pedestrians. • Replace signal system: The new signal system and intersection geometrics should be updated to include flashing yellow arrows and turn lanes as needed to improve traffic flow. The signal should be able to detect bicycles. Finally, the pedestrian push buttons will be replaced to meet ADA requirements. Position: The city is requesting that Hennepin County partner with the City for the reconstruction of the Texas Avenue/ Minnetonka Blvd intersection. Southwest LRT (Directed to State Legislature, Met Council & Hennepin County) Position : The City continues to strongly support the Southwest LRT Project. Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 16 [14] Transportation funding (Request directed to State Legislature) Issue: A comprehensive transportation system is a vital component in planning for and meeting the physical, social and economic needs of our state and metropolitan region. Adequate and stable sources of funding are necessary to ensure the development and maintenance of a high quality, efficient and safe transportation system to meets these needs. Analysis: Under current transportation f inancing structures, funding for the existing transportation system in the metropolitan region continues to be inadequate. Our transportation funding system relies primarily on local property taxes, local fees, gas tax, and the motor vehicle sales tax (MVS T). Automobiles are becoming more fuel efficient and MVST receipts continue to lag projections, resulting in funding levels that continually fail to meet the needs. Transportation funding and planning must be a high priority for state, regional and local p olicymakers so that the regional transportation system can sufficiently meet the needs of the state’s residents and businesses and its projected population growth. This includes the municipal state aid system. In addition, cities lack adequate tools and resources for the maintenance and improvement of local systems, with funding sources restricted to property taxes, local fees, and special assessments. Cost participation requirements for state and county roads can overburdened city budgets. It is imperative that alternative revenue generating authority be granted to municipalities and additional state resources be made available for this purpose to relieve the burden on the property tax system. Position: The city: • Supports stable and sufficient statewide transportation funding; • Supports local tools to meet the long-term transportation system needs of the city; • Supports funding to assist cities overburdened by cost participation responsibilities; • Supports state funding for state and county highway projects, including congestion and safety improvements; and • Supports state financial assistance, as well as innovations in design and construction. Transit financing (Request directed to State Legislature) Issue: The Twin Cities metropolitan area is served by a regional transit system that is expanding to include rail transit and dedicated busways. Any operating subsidies necessary to support this system should come from a regional or statewide funding source. The property taxpayers of individual cities and counties should not be required to fund the operation of specific transit lines or routes of service within this regional system. Analysis: MVST revenue projections have not been reliable and the Legislature has repeatedly reduced general fund support for Metropolitan Transit. As a result, the regional transit providers continue to operate at a funding deficit. Shifting demographics in the metropolitan region will mean increased demand for transit in areas with and without current transit service. Position: The city supports stable and growing revenue sources to fund the operating budget for all regional transit providers at a level sufficient to meet the growing operational and capital transit needs of the region and to expand the system to areas that currently have little or no transit options. The city Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 17 [15] also supports an increase in the regional sales tax to fund the expansion of regular route service, the continuing capital expenses and expanded operational needs of the metropolitan transit system, if the increase is accompanied by sufficient local controls over the collection and expenditure of the new revenue and geographic balance is maintained in the expansion of service to allow cities to appropriately plan for growth in population and service needs along new and expanded transit service. The city opposes diversions of the uses of this tax for any other purposes. Automated Vehicles (Request directed to the Met Council) Issue: Automated vehicles are those in which at least some aspect of a safety-critical control function (e.g., steering, throttle, or braking) occurs without direct driver input. Automated vehicles may be autonomous (i.e., use only vehicle sensors) or may be connected (i.e., use communications systems such as connected vehicle technology, in which cars and roadside infrastructure communicate wirelessly). Automated vehicles have the potential to bring about transformative safety, mobility, energy, and environmental benefits to the surface transportation system. These benefits could include crash avoidance, reduced infrastructure needs, energy consumption and vehicle emissions, reduced travel times, improved travel time reliability and multi-modal connectivity, and improved transportation system efficiency and accessibility, particularly for persons with disabilities and the growing aging population. Automated vehicles could also transform the private use of land in terms of reducing parking needs – surface or structured parking. Automated vehicle technologies are becoming some of the most heavily researched automotive innovations. Currently, some automated vehicle technologies are available, but are only a fraction of what will be available in the future. Position: MnDOT is undertaking research and planning related to automated/autonomous vehicles. The Met Council is encouraged to continue to work with MnDOT as a part of planning for the impact these types of vehicles will have on the region, particularly from a transportation and land use perspective. Public Safety Issues Police Trainee/Non-traditional Pathway to Policing Program (Request directed to State Legislature) Issue: The candidate pool for police officers in Minnesota continues to shrink in numbers and diversity. There is a narrowing in the representation of a candidate ’s diversity including but not limited to race and ethnicity, age and life experience, and academic and career development in other disciplines. During the 2017 legislative session $400,000 was appropriate d for communities participating in this new program on a 50/50 cost split. The need to create a wider and deeper candidate pool will continue to be a long term challenge for all police departments in the state. Position: The city requests that this funding not only be maintained but increased in future biennium’s. Railway Safety of Hazardous Materials and Oil Train Operations (Request directed to State Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 18 [16] Issue: The current state within St Louis Park suggests that there will be continued flow of hazardous material commodities including but not limited to crude oil and ethanol at current or increased levels in the future. Analysis: The demand for these commodities and the proximity of Minneapolis to our city points to St Louis Park as an alternative for managing heavy traffic and staging within the system. The potential risk exists across all of the system including the BNSF, CP and TCW lines. Track improvements that result from the SWLRT will allow for higher speeds and safer options for the rail companies to consider through St Louis Park. Position: The city needs to actively engage in legislative discussions around the accountability, safety and funding of accident prevention and responder training, and information sharing. There needs to be funding for community awareness, mitigation and resiliency efforts as well. Rail companies need to be required to share the needed information required for response and mitigation. Including the reinstatement of fees on railroads and pipelines as outlined in (2018-HF3775/SF3527) Local Control of Emergency Medical Services Issue: Current laws regulating emergency medical services (EMS) in Minnesota allow ambulance providers the ability to provide EMS services in an exclusive operating area known as a Primary Service Area (PSA) for an indefinite amount of time with little or no oversight or transparency. Analysis: Ambulance services currently have no response time requirement from the Emergency Medical Services Regulatory Board (EMSRB) - the state’s EMS regulatory agency which oversees and issues ambulance licenses. The EMSRB also has no oversight on ambulance billing rates, while ambulance services (both public and private) have the ability to use revenue recapture to receive unpaid bills from an individual’s state tax returns. These are only a few of the many examples of the limited oversight of ambulance services in the state. The current system does not require ambulance services to disclose the number of ambulances staffed, where the ambulance is responding from or any other important data points that would be important to ensuring a community is receiving quality ambulance services. While the current structure of Minnesota’s EMS regulations is intended to create exclusive operating areas, there are numerous overlapping service areas across the state with no guidance on who has the authority to determine which provider is the primary ambulance service for those overlapped areas. Position: It is our belief that local units of government - who are closest to the service delivery – that are best positioned to determine who the licensed ambulance provider is, what level of service is provided, and the authority to ensure there is transparency. Propose uncoupling the professional standards overview by the EMSRB from the service area determination thus allowing the local unit of government to determine who provides service within their political boundary. This allows the Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 19 [17] professional standards to continue to be set by the EMS Regulatory Board which is made up of industry professionals and stakeholders. Oppose statutory prohibition on residential fire sprinklers (Request directed to State Legislature) Issue: The Appellate Court struck down the Department of Labor and Industries (DLI) adoption of the latest International Residential Code (IRC). The IRC is for building new single-family and duplex homes, which had a provision for residential fire sprinklers in newly constructed one - and two-family ho mes that were 4,500 sq. feet and larger. Analysis: The sprinkler provision was challenged on whether it was done legally and appropriately. The refore the requirement to build these homes safer using sprinklers is no longer in effect. This is a concern because, in terms of fire safety, the most dangerous place to be is at home. In addition, most often the victims of a fire are the young and elderly , who have a more difficult time getting out in an emergency situation. Residential fire sprinklers save lives and are cost-effective. Recent studies in Minnesota show the cost of installing residential fire sprinkler systems averages $1.15 per sprinkled square foot, or approximately 1% of new home construction. Position: The city opposes efforts that prohibit future adoption of the residential fire sprinkler code . Oppose expansion of legal fireworks (Request directed to State Legislature) Issue: There is a continued effort to expand the sale and use of a wider variety of fireworks Analysis: The bill prohibits cities from banning the sale of fireworks, but it allows cities to pass ordinances banning people from using fireworks. Exploding fireworks would be available for purchase from June 1 to July 7, the use is not restricted. In the city of St. Louis Park where both business and residential properties are in close proximity there is an unacceptable level of risk given that many of these are wood frame combustible construction, non-sprinkled and high occupancy. There is an inherent danger in aerial fireworks which cause a number of injuries and pose a serious fire risk. Position: Oppose the following legislation which expands fireworks in Minnesota o Tents (2018 – HF328/SF235) o Bricks and Mortar (2017- HF1395/SF1191 Continued Health Insurance Coverage for Disabled Public Safety Officers (Request directed to State Legislature) Issue: MS299A.465 states that the employer is responsible for continued payment of their contribution for health insurance coverage for police officers, firefighters, and dependents, if applicable, that were disabled in the line of duty. Although cities may req uest a reimbursement of the health insurance payments, only a fraction is reimbursed from the Department of Public Safety, resulting in increasing costs due to this unfunded mandate. Position: The city has only been partially reimbursed for the cost of this mandate. Over the past 10 years, city has paid over $230,000 in health contributions for disabled public safety officers, and only Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 20 [18] 26% of the city’s 2019 request was reimbursed. The city requests that this mandate be fully funded by the state. Permit to Purchase Firearms/Permit to Carry (Request directed to State Legislature) Issue: Currently the Permits to Purchase Firearms statute (MN Stat. 624.7131; 624.7132) requires local law enforcement agencies to complete required background checks within 7 days and the Permit to Carry (MN Stat. 624.714) statute requires the County Sheriff’s Department to complete the required background checks within 30 days. Analysis: The St. Louis Park Police Department completes approximately 300 permits to purchase background checks per year. In 2020, the St. Louis Park Police Department anticipates having to complete approximately 500 permits to purchase backgrounds checks. Aligning the two statutes to require the background checks to be done in 30 days would allow local law enforcement agencies more time to complete thorough background checks and also reduce the number of applicants who act on impulse for a permit to purchase a firearm. Position : St. Louis Park supports aligning the Permits to Purchase Firearms statutes (MN Stat. 624.7131; 624.7132) with the Permit to Carry (MN Stat. 624.714) statut e in terms of the time required for conducting background checks (from 7 to 30 days). Protecting the Privacy and Safety of Public Officials and Peace Officers (Request directed to State Legislature) Issue: Only five states (FL, CO, CA, ID, TX) have a law prohibiting the publishing, posting, promotion of peace officers' and other public officials' home addresses, phones, spouse's addresses, other contact information, etc., with intent to cause harm or harassment. Minnesota has no such law, presenting an opportunity to join other states showing a commitment to protecting public officials and peace officers from having their personal information, spousal information, and other info published and/or shared on social media, with the intention of causing harassment or harm. Analysis: This is increasingly a concern for public officials and law enforcement when those seeking to cause harm recklessly share or publish emails or other correspondence that includes personal information. Any measure that reduces the threat of reporters or demonstrators showing up at public officials homes or those of relatives is a great option for addition to our statutes. Statutes that include the component requiring the publication or posting to be done WITH INTENT to cause harassment or harm seem likely to be more useful and defensible in the courts. Colorado's law can be found here (link ). With the proliferation of social media, there have been several instances where public officials personal information was disseminated to cause harm. For example, after the unfortunate death of Eric Garner in New York, the decedent’s daughter tweeted the home address of one of the involved officers to 5,000 Twitter followers who, in turn, re -tweeted this 500+ times. Position : This issue can affect any public official and Police Officers, when opposing sides of a discourse attract an element that wants to cause harm or harassment. The City supports an effort in Minnesota to add this protection to public officials’ privacy and the safety of their families. Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 21 [19] Criminal Background Checks (Request directed to State Legislature) Issue: Every day in Minnesota guns are sold by unlicensed sellers without first conducting a criminal background check to ensure that the buyer is not a prohibited purchaser. This proposal would close the online, gun show and individual sale loopholes by requiring all sales to at least have a criminal background check at the point of sale at an Federal Firearms License (FFL) before a transaction is legally allowed to occur. Analysis: The federal Gun Control Act of 1968 stipulates that individuals “engaged in the business” of selling firearms must possess a Federal Firearms License (FFL). Holders of FFLs are required to conduct background checks and maintain a record of all their firearm sales. Certain gun sales and transfers between private individuals, however, are exempt from this requirement. Those who would fail a background check can access firearms through these sources. Unlike an FFL, the seller is not required to conduct a background check to determine whether the purchaser is prohibited from purchasing and possessing a gun. Federal, state, local and tribal laws should be enacted to close these loopholes. If all gun sales proceed through an FFL, a single, consistent system for conducting gun sales, including background checks, will be established. The laws we have in place to ensure gun purchasers go through FFLs are undermined by oversights in the law that allow individuals prohibited from owning firearms to obtain weapons at events such as gun shows without undergoing a background check. Position: The City supports preventing individuals who are not legally able to purchase a gun from doing so without background checks at gun shows, online or in private transactions. Investments for Mandated law enforcement training (Request directed to State Legislature) Position: Support continuing the POST Board training reimbursement allocation to local agencies, which began in 2018, into fiscal year 2022-2023 through the Peace Officer Training Fund for mandated training in the areas of recognizing and valuing diversity and cultural differences, conflict management and mediation, crisis intervention and mental Illness crises. Gun Violence Protective Orders (GVPOS) (Request directed to State Legislature) Position: Support allowing law enforcement, qualifie d health care practitioners, family members and intimate partners who believe an individual’s dangerous behavior has a substantial likelihood to lead to violence to request an order from a civil court authorizing law enforcement to temporarily remove any guns in the individual's possession and to prohibit new gun purchases for the duration of the order. State wide data collection on race and/or ethnicity for stopped motorist’s (Request directed to State Legislature) Issue: There is not a state wide method of collecting a motorist’s race or ethnicity for traffic stops. Some police departments ask officers to report a person’s race and/or ethnicity. This option results in officers making assumptions on the motorist’s race and/or ethnicity and can lead to inaccurate data. Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 22 [20] Analysis: A state wide system would allow for agencies to submit and most importantly review accurate data to determine whether racial profiling is a problem in cities across the state. This information allows for greater police transparency and accountability. Position: The city supports a state wide system that accurately tracks information on traffic stops, including race and ethnicity, of stopped motorists. General Issues Local Control (Request directed to State Legislature) Issue: Cities are often laboratories for determining public policy approaches to the challenges that face citizens. Success in providing for the basic needs of a functional society is rooted in local control to determine how best to respond to the ever-changing needs of a citizenry. Because city government most directly impacts the lives of people, and representative democracy ensures that locally elected officials are held accountable for their decisions through local elections, local governme nts must have sufficient authority and flexibility to meet the challenges of governing and providing citizens with public services. Position: Individual communities should be allowed to tailor their services to meet the unique needs of their citizens without mandates and policy restrictions imposed by state and federal policy makers. The state should recognize that local governments, of all siz es, are often the first to identify problems and inventive solutions to solve them, and should encourage further innovation by increasing local control. The state should not enact initiatives that erode the fundamental principle of local control in cities across Minnesota. Levy Limits (Request directed to State Legislature) Issue: During the 2008 legislative session, levy limits were imposed for three years (2009-2011) on cities over 2,500 in population. A one-time levy limit was applied to taxes levied in 2013, payable in 2014, only. This was in effect for all counties with a population of 5,000 and over and cities with a population of 2,500 and over. All cities with a population less than 2,500, all towns and all special taxing districts were exempt from the limits. Levy limits replace local accountability with a state judgment about the appropriate level of local taxation and local services. Additionally, state restrictions on local budgets can have a negative effect on a city’s bond rating due to the restriction on revenue flexibility. Position: St. Louis Park opposes efforts to establish a levy limit or other proposed restrictions for local government budgets. Based on our legislative policies that strongly support local budgetary decision making, St. Louis Park opposes levy limits of any type. Local Government Aid (Request directed to State Legislature) Issue: St. Louis Park supports the LGA program as a means of ensuring all cities are able to provide basic services without over-burdening the property tax system. In 2003 St. Louis Park had its entire LGA Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 23 [21] allocation cut – approximately $2 million/yr. Several years ago a portion of this cut was restored – approximately $500,000/yr and based on house research estimates it will drop in 2019 to $267,271. This funding has been extremely helpful, particularly related to replacing aging infrastructure and equipment. Position: St. Louis Park strongly opposes reductions of LGA. Emerald Ash Borer (Request directed to State Legislature) Issue: Emerald Ash Borer (EAB) is the most destructive and economically costly forest pest ever to invade North America. Ash trees killed by EAB become brittle very quickly and will begin to fall apart and threaten overhead cables and power lines, vehicles, buildings and people. Few cities are prepared and no city can easily afford the costs and the liability threats resulting from EAB. Peer-reviewed studies have confirmed that a coordinated, landscape-based strategy is more cost effective than fighting EAB city by city. Position: St. Louis Park supports additional state funding to provide technical assistance and matching grants to communities for EAB management/removal costs and related practices. Legislative-Citizen Commission on Minnesota Resources Issue: The city needs funds for pollinator habitat and buckthorn control/vegetative restoration. Funds by the Legislative -Citizen Commission on Minnesota Resources would be used at Oak Hill, Louisiana Oaks Park and Bass Lake Preserve and support the city’s strategic plan on environment and sustainability. Position: St. Louis Park supports funding for these projects from the Legislative -Citizen Commission on Minnesota Resources. Records Retention Related to Correspondence (Request directed to State Legislature) Issue: HF 1185 was introduced relating to data practices that included changing the definition of “correspondence” in government record retention law to include social media and text messaging and requiring a minimum three -year retention period for correspondence. Analysis: The proposed bill was designed to provide a statewide standard retention period for correspondence. Concerns with the bill include an unfunded mandate on cities (especially small ones) to meet the new requirements, and the burden of including social media and text messaging in the definition of correspondence. Social media and text messaging capture typically requires separate capture software / hardware than email, and thus contributes to increased costs. Position : The city opposes the bill in its current form. State provided funding and restricting the definition of correspondence to email at this point would be helpful. Delaying full inclusion of social media and text messaging to future years so the State can include funding options (and possibly some standards) would also be helpful. The city does support a standard correspondence retention period and feels the proposed 3 year minimum is reasonable. That said, not every city is funded or technically Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 24 [22] ready to do this. As a result, the city currently endorses the LMC position on the role that should be fulfilled by existing records retention requirements. The current LMC position is to oppose HF 1185. Telecommunications and Information Technology (Request directed to State and Federal Legislature) Issue: Telecommunication s and information technology is essential public infrastructure for the efficient, equitable, and affordable delivery of local government services to residents and businesses. Telecommunications includes voice, video, data, and services delivered over cable, telephone, fiber- optic, wireless, and all other platforms. Analysis: The city and League of Minnesota Cities supports a balanced approach to telecommunications policy that allows new technologies to flourish while preserving local regulatory authority. Regulations and oversight of telecommunications services are important prerogatives for local government to advance community interests, including the provision of high quality basic services that meet local needs, spur economic development, and are available at affordable rates to all consumers. For the City of St. Louis Park, this is also consistent with its priority efforts to advance racial equity and to be a technology connected community. Supportive policies should also not diminish local authority to work cooperatively with other public agencies, non-profit organizations, and the private sector to broaden choice and competition of telecommunications services to meet local needs. Position : The city opposes the adoption of state and federal policies that restrict cities’ ability to finance, construct, or operate telecommunications networks. Cable Franchising Authority (Request directed to State and Federal Legislature) Issue: In 2019, the Federal Communications Commission (FCC) issued the 621 Order, which took effect with the potential to significantly reduce franchise fees and public, educational and government (PEG) fee revenue received by cities from cable operators. In October 2019 an appeal – with the City of St. Louis Park as a joint pe titioner – was filed in federal court seeking review of the 621 Order on the grounds that it is arbitrary and capricious, violates federal law and is otherwise contrary to the law. No final decision is expected on this appeal until spring of 2021. Analysis: The Legislature, Federal Communications Commission (FCC), and Congress should continue to recognize, support and maintain the exercise of local franchising authority to encourage increased competition between incumbent cable system operators and new wireline competitive video service providers including maintaining provisions in Minn. Stat. Ch. 238 that establish and uphold local franchising authority. Position: The city has not yet been contacted by the current cable franchisee regarding any changes to the expected franchise payments as a result of the 621 Order. However, given the depth of cable TV PEG operations and subscribers in St. Louis Park, and with cable franchise renewal negotiations underway, the city continues to closely track assaults on local franchising authority. Study session meeting of January 11, 2021 (Item No. 6) Title: 2021 legislative issues and priorities Page 25 Meeting: Study session Meeting date: January 11, 2021 Written report: 7 Executive summary Title: 2022 Pavement Management update - West Fern Hill (4021-1000) Recommended action: This report is intended to provide the council with a preview of the pavement management project for 2022 and staff’s recommendation to include segments of the Connect the Park implementation plan in the initial public process and design efforts. Policy consideration: Should staff include in the design and public process efforts the installation of Connect the Park bikeway and sidewalks segments identified in this report as a part of the 2022 pavement management project in the Fern Hill neighborhood? Summary: Engineering staff has been working on developing the project scope for the 2022 pavement management project. This annual project rehabilitates several miles of local residential streets. In 2022, the streets to be rehabilitated are in Pavement Management Area 8 in the Fern Hill neighborhood. The Connect the Park plan includes specific segments of bikeway and sidewalk on street segments programmed for the 2022 pavement management project. Since late 2019, there has been an ongoing policy discussion surrounding the Connect the Park (CTP) implementation plan. At the start of this policy discussion, the council directed staff to not initiate any new public processes for CTP segments until the policy discussion was comple te . This policy discussion is being conducted in a series of study sessions, expected to wrap up the second quarter of 2021. The public process for the 2022 PMP is scheduled to start in late January 2021. Staff recommends that we include the CTP bikeway and sidewalk segments in the scope for the project for consideration. Staff is concerned that not including the segments will result in a missed opportunity to discuss these segments with the public. Additionally, we have heard that there are community me mbers that are expecting these improvements to be included in the proje ct scope . Additional information on what is being recommended to be included for consideration is in the discussion section of this report. Financial or budget considerations: This project is included in the city’s 2022 Capital Improvement Plan (CIP) and will be paid for using franchise fees, utility funds, and General Obligation Bonds Strategic priority consideration: St. Louis Park is committed to providing a variety of options for people to make their way around the city comfortably, safely and reliably. Supporting documents: Discussion Pavement management project map Prepared by: Debra Heiser, engineering director Reviewed by: Aaron Wies en, project engineer; Ben Manibog, transportation engineer Approve d by: Tom Harmening, city manager Study session meeting of January 11, 2021 (Item No. 7) Page 2 Title: 2022 Pavement Management update - West Fern Hill (4021-1000) Discussion Background: The city’s Pavement Management Program (PMP) proactively addresses the condition of the residential streets within the city. Many of these streets are now approaching 50 years of age or more. The PMP was developed in 2003 to extend pavement life and enhance system-wide performance in a cost-effective and efficient way by providing the right pavement strategy at the right time . Street rehabilitation work included in the annual pavement management project consists of rehabilitating the existing bituminous pavement and replacing portions of concrete curb and gutter. Other work includes sewer repairs and watermain replacement. Street segment selection is based on street condition and field evaluations to determine the condition of the pavement, curb and gutter, and the city’s underground utilities. To be cost-effective and reduce inconvenience to the public, as a part of PMP projects, staff reviews all aspects of infrastructure in the neighborhood and includes infrastructure repairs, modifications, and new construction in the project scope when it is on the street segments scheduled for rehabilitation. Due to this, staff recommends incorporating Connect the Park (CTP) bikeway, sidewalk and trail segment construction into transportation projects scope where the specific CTP segment aligns with a specific pavement segment being rehabilitated. In addition, staff applies the living streets policy during project development. This includes reviewing bike and pedestrian connections, sidewalks, stormwater, street trees, and traffic management. Present considerations: The 2022 pavement management project rehabilitates several miles of lo cal residential streets in the Fern Hill neighborhood. The attached map identifies the street segments that have been selected for rehabilitation and outlines the various work to be performed on each street. Pavement management The overall transportatio n project includes the following work: •Pavement rehabilitation •Watermain and water service replacement on select street segments •Storm and sanitary sewer repairs •Stormwater improvements •Sidewalk repair •Street width evaluation •Street tree planting •Traffic management Connect the Park The CTP implementation plan includes specific segments of bikeway and sidewalk on street segments programmed for rehabilitation. The following bikeway and sidewalk segments are recommended to be evaluated as a part of this project (see attached map): Study session meeting of January 11, 2021 (Item No. 7) Page 3 Title: 2022 Pavement Management update - West Fern Hill (4021-1000) Bikeway •26th Street (Toledo Avenue to France Avenue) •Ottawa Avenue (Minnetonka Boulevard to 26th Street) •28th Street (Ottawa Avenue to Quentin Avenue) •Quentin Avenue (28th Street to 26th Street) •Tole do Avenue (28th Street to 26th Street) Sidewalk •Ottawa Avenue (29th Street to 28th Street) – both sides •Quentin Avenue (along 2924 28th Street) – east side •Quentin Avenue (27th Street to 26th Street) – east side •Toledo Avenue (along 2601 Toledo Avenue)- east side Gap sidewalks The living streets policy includes an evaluation of the sidewalk system as a part of all transportation projects and to identify gaps in the network. For purposes of discussion, a “gap” is considered a section of sidewalk that is missing on a continuous street block. The following sidewalk segments are recommended to be included for consideration on this project (see attached map): •Raleigh Avenue (28th Street to 27th Street)- west side •Toledo Avenue (along 2600 Toledo Avenue S ) – west side •28th Street (along 5200 28th Street) – north side •27th Street (along 2700 Toledo Avenue) – south side Resident feedback on sidewalks During past projects, staff has received requests from residents to include additional sidewalk segments in the project. If the city receives a resident request to add other sidewalk segments, staff will evaluate the segment and make a recommendation on inclusion with the project as a part of the overall project recommendation. Next steps: Unless directed otherwise by the Council, the bikeway and sidewalk segments in this report will be brought to the community for input during the public process. The public process will kick off in January with an online resident survey as well as an interactive map. The survey includes questions regarding walking, biking, transit, drainage and traffic in Fern Hill. The interactive map will provide respondents with the ability to pinpoint locations for potential infrastructure improvements (i.e., new sidewalks, drainage, traffic modifications). The information collected will be shared with the public at the first public meeting and will inform the project design scope. Due to COVID-19, staff is planning on conducting community engagement meetings virtually. As the year progresses, we will follow community health guidelines as we continue to engage the public. The individual bikeway and sidewalk segments will be evaluated as a part of the overall project and a staff -recommended design will be brought to council at the public hearing for consideration. The council will then be asked to approve, not approve or modify the staff recommended design. Below is the proposed schedule for the project. Study session meeting of January 11, 2021 (Item No. 7 ) Page 4 Title: 2022 Pavement Management update - West Fern Hill (4021-1000) Postcard sent to neighborhood to collect input (includes survey questions and an interactive map link ) Late January 2021 Community engagement (including virtual open houses, individual site visits , phone calls, emails, etc.) April-September 2021 City council s tudy session, public hearing, project approval September-October 2021 Advertise for bids January 2022 Construction April-November 2022 26TH ST W 28TH ST W NATCHEZ AVE SBARRYSTOTTAWA AVE SOTTAWA PL UTICA AVE SMINNETONKA BLVD 29TH ST W 27TH ST W 31ST ST WVERNON AVE SHIGHWAY 100 SSERVICE DR HIGHWAY 100 SMONTEREY AVE SRALEIGH AVE SQUENTIN AVE SPRINCETON AVE STOLEDO AVE SSALEM AVE SMONTEREY PKWY2022 Pavement Management Project Bikeway on 26th Street connects to France Avenue Legend Existing Trails Existing Sidewalks Public improvements to be evaluated Bikeways Connect the Park Sidewalks Sidewalk Gaps 2022 PM Project Street Rehabilitation/Mill and Overlay Watermain Replacement/Street Rehabilitation ´ Study session meeting of January 11, 2021 (Item No. 7) Title: 2022 Pavement Management update - West Fern Hill (4021-1000)Page 5