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HomeMy WebLinkAbout18-114 - ADMIN Resolution - City Council - 2018/08/06Resolution No. 18-114 Resolution adopting a modification to the redevelopment plan for Redevelopment Project No. 1; establishing the Bridgewater Bank Tax Increment Financing District therein and adopting a tax increment financing plan therefor Be it resolved by the City Council (the "Council") of the City of St. Louis Park, Minnesota (the "City"), as follows: Section 1. Recitals 1.01. The Board of Commissioners of the St. Louis Park Economic Development Authority (the "EDA") has heretofore established Redevelopment Project No. 1 and adopted the Redevelopment Plan therefor. It has been proposed by the EDA and the city that the city adopt a Modification to the Redevelopment Plan for Redevelopment Project No. 1 (the "Redevelopment Plan Modification") and establish the Bridgewater Bank Tax Increment Financing District ("A Redevelopment District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082 and Sections 469.174 to 469.1794, 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. 283 having taxing jurisdiction over the property to be included in the district, a review of and written comment on the plans by the St. Louis Park Planning Commission on June 20, 2018, approval of the plans by the EDA on the date hereof, and the holding of a public hearing by the council upon published notice as required by law. 1.04. Certain written reports (the "reports") relating to the plans and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the council and/or made a part of the city files and proceedings on the plans. The reports, including the redevelopment qualifications reports and planning documents, include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The council hereby confirms, ratifies and adopts the reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05 The city is not modifying the boundaries of Redevelopment Project No. 1. Resolution No. 18-114 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 Redevelopment Project No. 1 would not be available for redevelopment without the financial aid to be sought under the 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 Redevelopment Project No. 1 by private enterprise; and (c) the Redevelopment Plan, as modified, conforms to the general plan for the development of the city as a whole. Section 3. Findings for the establishment of the Bridgewater Bank Tax Increment Financing District 3.01. The council hereby finds that the District is in the public interest and is a "redevelopment district" under Section 469.174, Subd. 10 of the Act. 3.02. The council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF Plan, that the TIF Plan conforms to the general plan for the development or redevelopment of the city as a whole; and that the TIF Plan will afford maximum opportunity consistent with the sound needs of the city as a whole, for the development or redevelopment of the district by private enterprise. 3.03. The council further finds, declares and determines that the city made the above findings stated in Section 2 and this Section based on the reasons and supporting facts for each determination attached hereto as Exhibit A. 3.04. The council elects to calculate fiscal disparities for the District in accordance with Section 469.177, Subd. 3, clause b of the Act, which means the fiscal disparities contribution will be taken from inside the district. Section 4. Public Purpose 4.01. The adoption of the plans conforms in all respects to the requirements of the Act and will help fulfill a need to redevelop an area of the city which is already built up, to provide diversified housing 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. Resolution No. 18-114 Section 5. Approval and Adoption of the Plans 5.01. The plans, as presented to the council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Economic Development Coordinator. 5.02. The staff of the city, the city's advisors and legal counsel are authorized and directed to proceed with the implementation of the plans and to negotiate, draft, prepare and present to this council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Taxpayer Services Division Manager of Hennepin County ("manager") is requested to certify the original net tax capacity of the district, as described in the plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the EDA staff is authorized and directed to transmit this request to the manager in such form and content as the manager may specify, together with a list of all properties within the district, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The Economic Development Coordinator is further authorized and directed to file a copy of the plans with the Commissioner of the Minnesota Department of Revenue and the O i of the State Auditor pursuant to Section 469.175, Subd. 4a of the Act. inistration: Tom Harmer] f, City Manager A o to y the City Council August 6, 2018 Ja a ayor Resolution No. 18-114 Exhibit A The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for the Bridgewater Bank Tax Increment Financing District (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the Bridgewater Bank Tax Increment Financing District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10. The District consists of three parcels with plans to redevelop the area for commercial purposes. At least 70 percent of the area of the parcels in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. (See Appendix F of the TIF Plan.) 2. Finding that the proposed development, in the opinion of the city council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to resultfrom the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. The proposed development, in the opinion of the city, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in the TIF Plan meets the city's objectives for redevelopment, but that due to the high costs of redevelopment on the parcels currently occupied by substandard buildings, including costs associated with demolition, site improvements, and structured parking, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan: This finding is justified on the grounds that the costs of demolition, site improvements and structured parking add to the total redevelopment cost. Historically, these costs in the city have made redevelopment infeasible without tax increment assistance. The city reasonably determines that no other redevelopment of similar scope can be anticipated on this site without substantially similar assistance being provided to the development. Resolution No. 18-114 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 $7,594,200. 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 $3;062,036. 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 $4,532,164 (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. The project to be assisted by the District will 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 commercial development to the city.