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HomeMy WebLinkAbout16-044 - ADMIN Resolution - City Council - 2016/03/21RESOLUTION NO. 16-044 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1; ADOPTING THE MODIFICATIONS TO THE TAX INCREMENT FINANCING PLANS FOR THE TAX INCREMENT FINANCING DISTRICTS THEREIN; AND ESTABLISHING THE WAYZATA BOULEVARD TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR BE IT RESOLVED by the City Council (the "Council") of the City of St. Louis Park, Minnesota (the "City"), as follows: Section 1. Recitals 1.01. The Board of Commissioners of the St. Louis Park Economic Development Authority (the "EDA") has heretofore established Redevelopment Project No. 1 and adopted the Redevelopment Plan therefor. It has been proposed by the EDA and the City that the City expand the geographic boundaries of Redevelopment Project No. 1 and adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for Redevelopment Project No. 1 (the "Project"), adopt a Modification to the Tax Increment Financing Plans for the Tax Increment Financing Districts therein (the "TIF Plan Modifications"), and establish the Wayzata Boulevard Tax Increment Financing District (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification, the TIF Plan Modifications, and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082 and Sections 469.174 to 469.1794, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The EDA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The EDA and City have performed all actions required bylaw to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Hennepin County and Independent School District No. 270 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, approval of the Plans by the EDA on March 21, 2016, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports, including the redevelopment qualifications reports and planning documents, include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a pant of this resolution to the same extent as if set forth in full herein. 1.05 The City is expanding the geographic boundaries of Redevelopment Project No. 1 to be coterminous with the corporate boundaries of the City and is modifying the Redevelopment Plan therefor. Resolution No. 16-044 -2- Section 2. Findings for the Adoption and Approval of the Redevelopment Plan Modification. 2.01. The Council approves the Redevelopment Plan Modification, and specifically finds that: (a) the land within the Project area as expanded would not be available for redevelopment without the financial aid to be sought under this Redevelopment Plan; (b) the Redevelopment Plan, as modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project by private enterprise; and (c) that the Redevelopment Plan, as modified, conforms to the general plan for the development of the City as a whole. Section 3. Modification to the Tax Increment Financing Plans for the Tax Increment Financing Districts within Redevelopment Project No. 1. 3.01. The EDA and City have previously established the following Tax Increment Financing Districts within the Project: • 4900 Excelsior (County Number 132 1) • Aquila Commons (County Number 1311) • Edgewood (County Number 13 09) • Eliot Park (County Number 1318/1319) • Ellipse on Excelsior (County Number 1315) • Elmwood Village/Hoigaard Village (County Number 1312) • Hardcoat (County Number 1316) • Highway 7 Corporate Center 7 & HSTI (County Number 1313) • Mill City (County Number 1307) • Park Center (County Number 1304) • Park Commons (County Number 13 08) • Shoreham (County Number 1320) • The West End (County Number 1314) • Wolfe Lake Commercial (County Number 13 10) • Zarthan & 16th Street (County Number 1305 and 1306) 3.02. Pursuant to Minnesota Statutes, Section 469.175, Subd. 4(b)(1), the enlargement of the Project is deemed to be a modification of the Tax Increment Financing Plans for the Tax Increment Financing Districts within the Project. 3.03. The TIF Plan Modifications are amended to provide for the enlargement of the Project as described in the Redevelopment Plan Modification. Section 4. Findings for the Establishment of the Wayzata Boulevard Tax Increment Financing District. 4.01. The Council hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, Subd. 10(a)(1) of the Act. 4.02. The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum Resolution No. 16-044 -3- duration of the District permitted by the Tax Increment Financing Plan, that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 4.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 4.04. The St. Louis Park Economic Development Authority elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. Section 5. Public Purpose 5.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. For the reasons described in Exhibit A, the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make this development financially feasible. As such, any private benefits received by a developer are incidental and do not outweigh the primary public benefits. Section 6. Approval and Adoption of the Plans 6.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Economic Development Coordinator. 6.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 6.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the St. Louis Park Economic Development Authority is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 6.04. The Economic Development Coordinator is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. Resolution Reviewed Thomas KKLWJ44)ktn'g, City Manager s Attest: �4 Melissh Kennedy, City Clerk W Council March 21, 2016 Resolution No. 16-044 -5- 1W4I IV.]I1I:1 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for the Wayzata Blvd Tax Increment Financing District (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Wayzata Blvd Tax Increment Financing District is a redevelopment district as defined in M.S., Section 469.174 Subd. 10(a)(1). The District consists of two parcels, with plans to redevelop the area for housing, hotel, and/or office purposes. In meeting the statutory criteria to qualify the District as a redevelopment district, the City relies on the following facts and findings: - Pursuant to Section 469.174, Subd. 10(d), more than 70 percent of the area in the District is deemed to be occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures. - An inspection of the buildings located within the District, as summarized in a City Building Inspections letter dated January 23, 2012, resulted in a finding that more than 50 percent of the buildings were structurally substandard as defined in the TIF Act (see Appendix E of the TIP Plan). - On June 18, 2012, by Resolution No. 12-09 (the "EDA Resolution"), the EDA found that the parcels were occupied by structurally substandard buildings (see Appendix E of the TIF Plan), and on September 24, 2012, the EDA entered into a development agreement with 9920 Hotels, LLC, providing for the demolition of the buildings. Demolition was completed on July 9, 2014. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable facture: This finding is supported by the fact that each of the projects proposed for the District meets the City's objectives for redevelopment. Historically, due to the high cost of redevelopment within the City for housing, hotel, and office purposes and the cost of financing the proposed improvements, these projects would be feasible only through assistance, in part, from tax increment financing. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan: This finding is justified on the grounds that the cost of site and public improvements and utilities add to the total redevelopment cost of any of the projects proposed within the District. As stated above, high redevelopment costs in this area have made most redevelopment infeasible without tax increment assistance. Any projects that could potentially move forward without Resolution No. 16-044 -6- public assistance would necessarily be much smaller in scope, and would not fully put the property in the District to its highest and best use. Thus, the City finds that no other redevelopment of similar scope can reasonably be anticipated on this site without assistance substantially similar to that provided for comparable projects in the past. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $34,989,000. c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $12,178,330. d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $22,810,670 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Redevelopment Project No. 1 by private enterprise. Each of the projects proposed to be constructed within the District would result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City.