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98-8642r z RESOLUTION NO. 8642 RESOLUTION MODIFYING THE RICHFIELD REDEVELOPMENT PROJECT AREA AND ADOPTING THE MODIFICATION TO THE REDEVELOPMENT PLAN THERETO; AND ESTABLISHING WITHIN REDEVELOPMENT PROJECT AREA THE URBAN VILLAGE TAX INCREMENT FINANCING DISTRICT AND ADOPTING THE RELATED TAX INCREMENT FINANCING PLAN THERETO BE IT RESOLVED by the City Council (the "Council") of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Richfield Housing and Redevelopment Authority (the "Authority") has heretofore established the Richfield Redevelopment Project Area (the "Redevelopment Project") and adopted the Redevelopment Plan with respect thereto and it has been proposed that the Authority establish within the Redevelopment Project the Urban Village Tax Increment Financing District and approve and adopt the related Tax Increment Financing plan therefor (the "TIF Plan") and the modification to the existing Redevelopment plan therefor the (the "Modification"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047 and 469.174 through 469.179, inclusive, as amended, all as reflected in the TIF Plan, and presented for the Council's consideration. 1.02. The Council has investigated the facts relating to the TIF Plan. 1.03. The City has performed all actions required by law to be performed prior to the establishment of the Urban Village Tax Increment Financing District and the adoption and approval of the proposed Modification and TIF Plan relating thereto, including, but not limited to, notification of Hennepin County and School District No. 280 having taxing jurisdiction over the property to be included in the Urban Village Tax Increment Financing District; a review of and written comment on the TIF Plan by the City Planning Commission, and the holding of a public hearing upon published notice as required by law. 1.04 Certain written reports (the "Reports") relating to the TIF Plan and to the activities contemplated therein have heretofore been prepared by staff and submitted to the Council and/or made a part of the City or Authority files and proceedings on the TIF Plan. The Reports include data, information and/or substantiation constituting or relating to (1) the "studies and analyses" on why the new Tax Increment District meets the so-called "but for" test; and (2) 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. FindinQs for the Approval of the Modification and TIF Plan. 2.01. The Council hereby finds that the Modification and the establishment of the Urban Village Tax Increment Financing District and the TIF Plan, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for redevelopment in the public purpose and accomplish certain objectives as specified in the TIF Plan, which are hereby incorporated herein. Resolution No. 8642 .,.2- Section 3. Findings for the Establishment of the Urban Village Tax Increment Financina District. 3.01. The Council hereby finds that the Urban Village Tax Increment Financing District is a redevelopment district under Minnesota Statutes, Section 469.174, subd. 10 (a)(1). 3.02. The Council further finds that the proposed redevelopment, in the opinion of the Council, would not occur solely through private investment within the reasonably foreseeable future and that the increased market value on the site that could reasonably be expected to occur without the use of tax increment finance would be less than the increase in the market value estimated to result for 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 of the Urban Village Tax Increment Financing 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. 3.04. The City of Richfield elects to calculate fiscal disparities for this District in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause b, which means the fiscal disparities contribution will be taken from within the District. Section 4. Approval of the Modification and TIF Plan. 4.01. The Modification and the TIF Plan, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, is hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Clerk. 4.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the TIF 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. 4.03. The Auditor of Hennepin County is requested to certify the original net tax capacity of the Urban Village Tax Increment Financing District, as described in the TIF Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the City of Richfield 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 Urban Village Tax Increment Financing District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. Resolution No. 8642 -3- 4.04. The City is further authorized to file the Modifications to the Redevelopment Plan for the Richfield Redevelopment Project Area and the Tax Increment Financing Plan for the Urban Village Tax Increment Financing District with the Commissioner of Revenue. Adopted by the City Council of the City of Richfield, Minnesota this 23rd day of November, 1998. h~~W Martin J. Kir , Mayor A~ f7hJJ Thomas P. Ferber, City Clerk RESOLUTION NO. 8642 EXHIBIT A The reasons and facts supporting the findings for the adoption ofthe Tax Increment Financing Plan for Urban Village Tax Increment Financing District as required pursuant to MS., Section 469.175, Subd 3 are as follows: 1. Finding that Urban Village Tax Increment Financing District is a redevelopment district as defined in MS., Section 469.174, Subd 10(a)(1). Urban Village Tax Increment Financing District consists of 21 parcels, with plans to redevelop the area for commercial purposes. At least 70 percent of the area in the parcels in Urban Village Tax Increment Financing District are occupied by buildings, streets, utilities, or other improvements and more than 50 percent of the buildings in Urban Village Tax Increment Financing District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (See Appendix F of the TIF Plan). 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax incrementsfor the maximum duration of Urban Village 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: This finding is supported by the fact that the redevelopment proposed in this plan meets the City's objectives for redevelopment. In order to facilitate the project, the developer must buy single family homes at a price higher than rental town house project will support. Further, since this is an urban setting, no land is available for parking. Therefore, the developer must build approximately 600 car parking ramp. Due to this high cost of redevelopment, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter as justification that he would not have gone forward without tax increment assistance ( see attachment in Appendix G of the TIF Plan). The increased market value of the site that could reasonable 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 incrementsfor the maximum duration of the TIF District permitted by the Plan: The City supported this finding on the grounds that the cost of constructing site improvements, a public ramp and utilities add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. Therefore, the City reasonably determines that no other redevelopment of any kind is anticipated on this site without substantially similar assistance being provided to the development. Accordingly, the increased market value anticipated without tax increment assistance is $0. R~~olution No. 8642 -2-.. Exhibit A A comparative analys~s of estimated market values both with and without establishment of Urban Village Tax Increment Financing District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in Urban Village Tax Increment Financing District, the total increased market value would be up to $21,828,175. The present value of tax increments from Urban Village Tax Increment Financing District is estimated to be $8,579,438. It is the Council's finding that no development with a market value of greater than $4,469,236 would occur without tax increment assistance in this.district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition, public improvements, site improvements and public utilities in the general area of the Urban Village Tax Increment Financing District (see Cashflow in Appendix D of the TIF Plan). 3. Finding that the Tax Increment Financing Planfor Urban Village Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning Commission on October 27, 1998. The Planning Commission found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Planfor Urban Village 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 the Richfield Redevelopment Project Area by private enterprise. The project to be assisted by Urban Village Tax Increment Financing 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 development to the City.