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02-9198r I I I RESOLUTION NO. 9198 20 RESOLUTION ESTABLISHING THE CITY BELLA TAX INCREMENT FINANCING DISTRICT WITHIN THE RICHFIELD REDEVELOPMENT PROJECT AREA AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR BE IT RESOLVED by the City Council (the "Council") of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed by the HRA that the City establish the City Bella Tax Increment Financing District (the "District") and adopt a Tax Increment Financing Plan therefor ( the "Plan"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, 469.174 to 469.179, all inclusive, as amended, (the "Act") all as reflected in the Plan, and presented for the Council's consideration. 1.02. The HRA and City have investigated the facts relating to the Plan and have caused the Plan to be prepared. 1.03. The HRA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plan, including, but not limited to, notification of Hennepin County and Independent School District No. 280 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plan, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plan and to the activities contemplated therein have heretofore been prepared by staff or by consultants retained by the City or the HRA and submitted to the'Council and/or made a part of the City files and proceedings on the Plan. Included among the Reports is a report prepared by Short Elliott Hendrickson, Inc. ("SEH"), entitled "City of Richfield, Redevelopment Assessment Proposed 'City Bella' Redevelopment Area" attached hereto as Exhibit B, which report was further supplemented by testimony at the pUblic hearing by Jason P. Zemke of SEH. The Reports include data, information and/or substantiation constituting or relating to the bases 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. Section 2. Findinas for the Adoption and Approval of the Plan. 2.01. The Council hereby finds that the Plan, as is intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development, serve a public purpose and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findinas for the Establishment of City Bella Tax Increment Financina District. 3.01. The Council hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, subd. 10 (a)(1). 3.02. The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the Tax Increment Financing Plan, that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the 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 this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. I 3.04. The Richfield Housing and Redevelopment Authority elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. 3.05. The Council finds that the Plan contains the requirements of Minnesota Statutes, 9 469.175 subdivision 1. Section 4. Public Purpose 4.01. The adoption of the Plan conforms in all respects to the requirements of the Act and will help fulfill a need to redevelop an area of the City that qualifies for treatment as a Redevelopment District under the Act, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 5. Approval and Adoption of the Plan. 5.01. The Plan, 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 Community Development Director. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed I to proceed with the implementation of the Plan 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 Auditor of Hennepin County is requested to certify the original net tax capacity of the District, as described in the Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the Richfield Housing and Redevelopment 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. 5.04. The Community Development Director is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue pursuant to Minnesota Statutes 469.175, Subd. 4a. Adopted by the City Council of the City of Richfield, Minnesota, this 11th day of June, 2002. ATTEST: '--1lotM1~ ~ Nancy Gibbs, ty Clerk I I I I EXHIBIT A The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for City Bella Tax Increment Financing District, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that City Bella Tax Increment Financing District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a)(1). 2. The District consists of seven parcels, with plans to redevelop the area for mixed-use housing and retail purposes. Parcels that make up at least 70 percent of the area 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, and Exhibit B to this Resolution). 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 City Bella Tax Increment Financing District permitted by the 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: The area to be included in the districtras not been significantly upgraded or renovated for many years. The only significant new construction activity in the area within the past quarter century was accomplished only because public aS$istance was made available. The proposed development, which includes retail, commercial and housing calls for the acquisition of all of the land in the District, the demolition of all improvements, and the comprehensive redevelopment of the entire area. Site assembly costs, including the need to purchase buildings and other improvements only to demolish them before redevelopment can take place, and to remediate pollution that has been found on the site, would understandably seem to prevent the proposed development to take place through private investment. Because the parcels within the proposed district are in multiple ownerships, it is unlikely that assembly could take place without the ability to compel sale, unless a premium were paid for the land. The developer is also being asked to provide an affordable housing component to the development. Absent public assistance, private investors would likely not elect to participate in such a program. These conclusions are reinforced by the analysis prepared by Ehlers & Associates, Inc., and by a letter provided by the developer and a pro forma as justification that ther:ieveloper would not have gone forward without tax increment assistance (see Appendix G). 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 TIF District permitted by the Plan: On the basis of what has been stated above, the City finds it unlikely that any new development impacting market values will take place in the district. The only significant potential for new development in the area would be on the two completely vacant parcels, in any event, it is the Council's finding that no development or combination of developments with a market value of greater than $43,757,412 (based on Appendix D to the TIF Plan) would occur without tax increment assistance in this district within 25 years. 3. Finding that the Tax Increment Financing Plan for City Bella Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the Plan and found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for City Bella Tax Increment Financing District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Richfield Redevelopment Project Area by private enterprise. No significant redevelopment has occurred within the area of the district within the past 25 years without public assistance. Consequently, it is the determination of the City that absent the assistance authorized by the Plan, no development or redevelopment of the area by private enterprise can be reasonably anticipated. The Council, also finds that the implementation of the Plan through the construction of the proposed development will increase the availability of safe and decent life-cycle housing in the City, will increase the tax base, will add a high quality mixed- use development to the City, will eliminate or prevent the spread of blight, and will remove and replace substandard structures and other conditions in furtherance of the objectives for which the District is being created. I I I