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06-20-94 agendaCITY OF RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, JUNE 20, 1994 COUNCIL CHAMBERS 7:00 P.M.' AGENDA CALL TO ORDER APPROVAL OF MINUTES OF (1) SPECIAL HRA MEETING HELD CONCURRENTLY WITH CITY COUNCIL MEETING OF APRIL 25, 1994 AND (2) HRA MEETING OF MAY 16, 1994 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF CONTRACT WITH W.D. SCHOCK COMPANY FOR REPLACEMENT DWELLING INSPECTION SERVICES FOR NEW FORD TOWN AND RICH ACRES RELOCATION HOMES HRA LETTER NO. 44 3. CONSIDERATION OF RESOLUTION APPROVING MODIFICATION TO RICHFIELD REDEVELOPMENT PROJECT PLAN RELATED TO RICHFIELD REDISCOVERED HOUSING PROGRAM; REQUESTING RICHFIELD CITY COUNCIL TO CONDUCT PUBLIC HEARING THEREON; AND RECOMMENDING APPROVAL OF PLANS HRA LETTER NO. 45 4. CONSIDERATION OF RESOLUTION REGARDING FINDINGS OF HRA CONCERNING DEVELOPMENT OF RICHFIELD REDISCOVERED PROPERTY, 6625 STEVENS AVENUE HRA LETTER NO. 46 5. EXECUTIVE DIRECTOR REPORT 6. CLAIMS AND PAYROLL ADJOURNMENT AUXILIARY AIDS FOR INDIVIDUALS WITH DISABILITIES ARE AVAILABLE UPON REQUEST. REQUESTS MUST BE MADE AT LEAST 96 HOURS IN ADVANCE . TO THE ADMINISTRATIVE SERVICES DIRECTOR AT 861-9702. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 46 Agenda June 20, 1994 Issue Statement: Findings of the HRA concerning the development of Richfield Rediscovered property at 6625 Stevens Avenue. Background: At the May 16, 1994 HRA meeting, the HRA discussed a response to the development of the referenced property as a licensed care facility. Staff evaluation concluded that the development does not meet the HRA's Richfield Rediscovered Procedural Guidelines. As reflected in meeting minutes, the HRA requested that Ron Batty, HRA legal counsel: 1. prepare a resolution which lays out findings in this matter, listing Richfield Rediscovered Program guidelines as they fall within the confines of the law; and 2. monitor the matter, and if a law suit is anticipated, the HRA should establish a meeting with Department of Human Services Commissioner Gomez. The requested resolution, for HRA consideration, is attached to . this letter. The Attorney General's office has reportedly continued to work on the matter by evaluating other development options provided by HRA staff referrals. However, there has been no additional contact in some time with staff or legal counsel by the Attorney General's office concerning the matter. Recommended Motion: 1. Adopt the attached resolution which outlines the position of the HRA concerning the development of 6625 Stevens. 2. Continue to monitor the matter. Alternative Recommendation: Modify the resolution or take no further action at this time. Mr. Batty will attend the meeting and respond to questions and comments of the HRA, modifying the resolution if necessary. Discussion/Decision Mode: The lack of urgency seemingly office suggests that they are or may not include development Counsel and staff continue to U JDP:ds expressed by the Attorney General's considering other options which may of the referenced property. Legal monitor the matter. Re f ly submitted, Ja erosser Ex c Director 0 RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION RELATING TO RICHFIELD REDISCOVERED PROGRAM BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: Section 1. Recitals. 1.01 On July 16, 1990 the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA"), adopted a program known as Richfield Rediscovered (the "Program"). A major purpose of the Program was to make available larger single family housing units for owner occupants. 1.02 Pursuant to the Program, the HRA adopted the Richfield Redevelopment Project Plan and.Tax Increment Financing Plans for Tax Increment Financing District A-1 and Tax Increment Financing District B-1 to assist financing of the redevelopment of properties within the Program. . 1.03 By June, 1994 the HRA has used the Program to redevelop 27 single family sites with homes containing 3-4 bedrooms, 2-3 baths, a double car garage, and other desired amenities which are frequently unavailable or in short supply in Richfield. 1.04 Due to the success of the Program, the HRA has periodically amended the Project to include additional properties in tax increment financing districts. An amendment to be considered in June 1994 will establish Tax Increment Financing District A-3 and B-3 and further modify the project plan. Section 2. Program Guidelines. 2.01 In order to achieve the objectives of the Program, the HRA has adopted guidelines (the "Guidelines") for participation in the Program. The Guidelines are applicable to all properties eligible for inclusion in the Program and have been used in the 27 instances in which new single family homes have been developed under the Program. 2.02 The Guidelines, which are contained in the document entitled "Richfield Rediscovered Procedural Guidelines" regulate numerous aspects of the Program, including restricting homes to owner occupants. • 2.03 The Guidelines require owner occupancy of all structures. 2.04 The Guidelines contain architectural standards and a procedure for project review by the HRA staff. 2.05 Because the Program involves a public subsidy in the price of the land, the HRA requires that the new structure meet a specified minimum market value and sometimes requires the developer to execute an assessment agreement. Section 3. Other Programs. 3.01 The Program is only one of many programs operated by the HRA for the purpose of keeping and preserving the housing stock within the City and providing alternatives to persons who are residing or wish to reside within the community. The HRA, which is committed to nondiscrimination in every context, operates the following housing programs in addition to the Richfield Rediscovered Program: (a) Housing Assistance Program (Section 8). The HRA provides rental assistance to approximately 370 low income households, specifically those whose income is 50% or less than median income in the Twin Cities. • (b) Deferred Loan Housing Rehabilitation Program. The HRA has supported approximately 330 homeowners with low incomes by providing interest free loans in order to allow them to make housing repairs and improvements. (c) New Home Program. The HRA has provided approximately 25 opportunities for first time home buyers of moderate income to purchase a home within the city. The HRA acquires blighted properties, demolishes the structure and contracts with Hennepin Technical College to have students build new structures on the sites. (d) Affordable Homes Initiative/Habitat for Humanity. The HRA participates with Habitat for Humanity by contributing sites for use as single family owner- occupied properties at a price of $1.00 each. Two projects completed in 1993 represented a land write- down by the HRA of almost $90,000. (e) Richfield Rediscovered Remodeling Program. The HRA provides a package of technical and financial assistance so that homeowners may obtain the resources necessary to improve homes which are small and out-dated or lack the amenities which are . commonly desired today. The HRA has worked with approximately 80 homeowners since late 1993. . (f) Transformation Homes Program. The HRA assists homeowners in obtaining financing for large rehabilitation projects. In addition to the amount privately borrowed, the HRA lends up to 15% of the remodeling contract amount to allow completion of the project. Resources are sufficient to assist 10 homeowners in 1994. 3.02 In addition to the programs listed in section 3.01, the HRA has participated in a number of specific projects of benefit to low and moderate income persons, including the following: (a) Sheridan Court is a 30-unit apartment project for developmentally disabled persons capable of independent living. This was a Section 8 project in which the HRA contributed $100,000 to assist in site acquisition and housing development. (b) Westminister Robert Will Housing consists of 11 units of housing for chronic mentally ill adults capable of independent living. The HRA facilitated the identification of a site and provided general support to the non-profit development team. • (c) The Red Fox Run No. 1. The HRA acquired five blighted properties and sold the sites to a developer to provide five large family scattered site single family Section 8 rental homes. (d) Rae Drive townhomes. The HRA cleared several blighted homes and developed 10 townhomes for moderate income, first-time homeowners. Section 4. Development of 6625 Stevens Avenue. 4.01 HRA staff was approached in February 1994 by a real estate representative of America's Home Team, Inc./Home Associates (the "Developer") regarding the purchase of 6625 Stevens under the Program. In late April 1994, upon initial contact with the Developer, staff advised the Developer that the proposed use of the site for a facility for disabled adults was ineligible for participation in the Program because they did not propose for the house to be occupied by the owners. 4.02 The Developer is operating under an arrangement with the Minnesota Department of Human Services (the "DHS") for the purpose of locating single family living for disabled adults. DHS has pursued the matter and threatened to litigate the HRA's refusal to allow the Developer to purchase the lot at the Program's subsidized rate. 4.03 The assistant attorney general representing DHS in the matter has had frequent contact with the HRA's attorney and has expressed the belief that the HRA's failure to sell the property to the Developer is a violation of Minnesota Statutes, 245A.11 and 462.355, subd. 7. 4.04 The HRA attorney has expressed the opinion that neither cited statute requires the HRA to sell the property at a subsidized price to an entity which refuses to be bound by the Guidelines adopted by the HRA for the Program. 4.05 The Attorney General's office and DHS met on May 25, 1994 to plan their strategy regarding this matter. To date, the HRA has heard nothing further from either party. Section 5. Findings. 5.01 The HRA finds the Richfield Rediscovered Program is in the vital best interests of the City and reaffirms all Program Guidelines, including the requirement of home ownership. 5.02 The HRA declares its willingness to delete 6625 Stevens from the Program and to sell the property to the Developer at its market value of $45,000. • 5.03 The HRA will continue to operate all its programs and projects in a nondiscriminatory manner and rejects the assertions by DHS and the office of the Attorney General that the Richfield Rediscovered Program or its administration by the HRA is in violation of state law. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of June, 1994. Thomas E. Harms, Chairperson ATTEST: Vern Luettinger, Secretary 0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 45 Agenda June 20, 1994 Issue Statement: Proposed approval of Richfield Rediscovered Housing Program, dated June 20, 1994: Approval of Modification No. 3 to the Redevelopment Plans for Redevelopment Project Areas "A" and "B"; Modification No. 1 to the Tax Increment Financing Plans for Tax Increment Redevelopment Districts "A-2" and "B-2"; and Tax Increment Financing Plans for Tax Increment Redevelopment Districts "A-3" and "B-3". Background: On April 18, 1994, the HRA appropriated an additional $700,000 from the development account to provide for the continuation of the Richfield Rediscovered Program. During May and June of 1994, staff undertook the following: 1. Contacted approximately 45 property owners that had indicated an interest in selling their property within the last year; 2. Inspected 36 sites to determine program eligibility and • determined that all 36 sites qualified for the program; and 3. Excluded the remaining six properties from the 1992 program acquisition list (Cycle II) as these property owners withdrew from program participation. From the above-findings and the HRA's recent appropriation, the proposed 1994-95 Richfield Rediscovered Program would accomplish the following: 1. Purchase and demolish approximately 12 substandard homes on properties valued by the Hennepin County Assessor at $611,000; 2. Provide 12 homes valued in a range of $110,000 to $140,000; and 3. Generate an estimated $300,000 in land proceeds. The estimated budget for the 12 properties anticipated to be redeveloped is as follows: Property Acquisition $628,000 Appraisals $ 4,000 Demolition/Site Clearance $ 60,000 Legal Expenses $ 8,000 Total $700,000 • Tax increments generated by the new housing development over a 25 year period would be paid to the development fund and would approximate $13,000 to $22,000 annually. The Redevelopment Plans and Tax Increment Financing Plans under the proposed modification are attached for review. The text of the modifications for the 1994-95 Program, known as Cycle III, are essentially the same as past modifications. The reason modifications must be made is to alter the list of property which may be purchased. For easy readability, the page numbering of each section is prefixed by the type of modification. For example, the modification to the Redevelopment Plan for Redevelopment Project Area "A" is page numbered A-1, A-2, etc. while the page numbering for modification to the Tax Increment Financing Plan for Tax Increment District A-2 is page numbered A-2-1, A-2-2, etc. The "Note to Reader" at the beginning of the plans provides additional information with regard to plan structure. The following provides additional information on the housing program modification. Redevelopment Project Area Boundary A boundary change is being proposed so that two qualified properties which currently fall outside the boundary of Redevelopment Project Area "B" can be redeveloped. The boundary expansion occurs at two different locations of Redevelopment Project Area "B". The first change is approximately at the intersection of Lyndale Avenue and Crosstown Highway 62 in order to • include 6236 Pleasant Avenue as a redevelopment opportunity. The second change is approximately at the intersection of Oliver Avenue and West 64th Street in order to include 6320 Oliver Avenue. Acauisition List of Current Plan and 1994-95 Proaram Ob.iectives As the financial resources available from the HRA are limited, approximately 12 of the 36 eligible properties may be purchased at this time with the $700,000. Therefore, 24 properties remain as qualifying candidates for acquisition when additional funding becomes available. Early Property Acquisitions The properties at 7537 Girard Avenue and 6625 Stevens Avenue will undergo early acquisitions prior to final City Council approval of the subject modifications. These properties were approved for acquisition by the HRA on March 21, 1994 and December 20, 1993, respectively. Also, the approvals were contingent upon the properties being incorporated into the Richfield Rediscovered Housing Program. Relationship of Current Plan to Plan The Richfield Redevelopment Pro tax increment projects and were of the development account tool Rediscovered, with unencumbered Richfield Redevelopment Project ject Plans encompass all existing approved in order to take advantage to fund programs such as Richfield non-tax increment money arising out • of redevelopment projects. As a result of the plan modifications associated with the Richfield Rediscovered Program, the Richfield Rediscovered Project Plan and Tax Increment Financing Plan dated June 14, 1993 are also modified by reference. To implement the program under proposal, the following must be considered by the HRA: 1. The Redevelopment Plans; 2. The Tax Increment Financing Plans; and 3. The referral of these documents to the Planning Commission and City Council for their consideration. If the HRA concurs, the Planning Commission on June 28, 1994 will be requested to consider resolutions which find the redevelopment plans and tax increment financing plans as well as the proposed acquisition and dispositions of property by the HRA to be in conformance with the Comprehensive Plan of the City. Inasmuch as these plan documents are very similar to those of previous program cycles, a favorable response may be forthcoming. Following a public hearing to be scheduled for July 25, 1994, the City Council would consider the redevelopment plans and tax increment finance plans. Hennepin County and the Richfield School District will be notified of the public hearing, all of this as required by law. Recommended Motion: . Adopt the attached resolution which: A. Approves Modification No. 3 to the Redevelopment Plans for Redevelopment Project Areas "A" and "B"; Modification No. 1 to the Tax Increment Financing Plans for Tax Increment Redevelopment Districts "A-2" and "B-2"; Tax Increment Financing Plans for Tax Increment Redevelopment Districts "A-3" and "B-3"; and by reference also approves a modification to the Richfield Redevelopment Project Plan and Tax Increment Plan subject to review and approval by the Planning Commission. B. Requests the Planning Commission to review the redevelopment plans and tax increment financing plans and find the plans and property acquisitions and dispositions to be in conformance with the Comprehensive Plan of the City. C. Requests the City Council to: 1) Hold a public hearing on July 25, 1994 at which time the modified redevelopment plans, modified tax increment plans, and new tax increment plans will be considered; and 2) Approve the modified redevelopment plans, modified tax . increment plans and new tax increment plans, and by reference, also approves a modification to the Richfield Redevelopment Project Plan and Tax Increment Plan. Basis of Recommendation: 1. Richfield Rediscovered is a proven redevelopment program. Qualifying redevelopment sites have been identified within an area originally approved in 1990, with only a slight modification to that area as discussed above. 2. The Planning Commission is required to review the 1994 plans and make a finding as to whether proposed acquisition and relocation of the properties identified would be in conformance with the Comprehensive Plan. 3. There is a market of property owners who wish to voluntarily sell their substandard and/or obsolete homes. 4. There is a builder and buyer market for new, larger, contemporary housing. 5. Funding sources are available to continue the program. 6. Existing staff resources are available to administer the program. 7. Legal counsel has reviewed the program and related documents and found them to be in compliance with existing law. . Alternative Recommendation: 1. Modify the proposed program. 2. Delay action until a future time. 3. Terminate any additional activity on the proposal. Discussion/Decision Mode: This modification is in part being processed to provide new construction opportunities for New Ford Town and Rich Acres Phase I residents and also to make it possible for other interested buyers to initiate construction during 1994. y submitted, osser irector JDP:ds is RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION APPROVING MODIFICATION TO RICHFIELD REDEVELOPMENT PROJECT PLAN, CONSISTING OF MODIFICATION NO. 3 TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT AREAS A AND B, MODIFICATION NO. 1 TO THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT REDEVELOPMENT DISTRICTS "A-2" AND "B-2", AND TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT REDEVELOPMENT DISTRICTS "A-3" AND "B-3", ALL RELATED TO THE RICHFIELD REDISCOVERED HOUSING PROGRAM; REQUESTING THE RICHFIELD CITY COUNCIL TO CONDUCT A PUBLIC HEARING THEREON; RECOMMENDING APPROVAL OF THE PLANS BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: Section 1. Recitals. 1.01 The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") adopted redevelopment plans for Redevelopment Project A and Redevelopment Project B (the "Redevelopment Plans") and tax increment financing plans for Tax Increment Financing District "A-1" and Tax Increment Financing District "B-1" (the "TIF Plans") for the • Richfield Rediscovered Housing Program (the "Project") on July 16, 1990. The Redevelopment Plans and TIF Plans are known collectively as the "Plans". 1.02 The HRA adopted Modification No. 1 to the Redevelopment Plan for Redevelopment Project Area "A" and Modification No. 1 to the Tax Increment Financing Plan for Tax Increment Financing District No. "A-1" and a new tax increment financing plan for Tax Increment Redevelopment District No. "A-2" on July 20, 1992. 1.03 The HRA adopted Modification No. 1 to the Redevelopment Plan for Redevelopment Project Area "B" and Modification No. 1 to the tax increment financing plan for Tax Increment Redevelopment District "B-1" and a new tax increment financing plan for Tax Increment Redevelopment District No. "A-2" on July 20, 1992. 1.04 On May 17, 1993 the HRA adopted a Redevelopment Plan for the Richfield Redevelopment Project Area, which consisted, in part, of the Project and which Redevelopment Plan contained Modification No. 2 to the Plans. 1.05 Additional property acquisitions have occurred thereafter and have necessitated the consideration of this Modification No. 3 to the Plans, consistent with the plan to modify the • Plans annually with the addition of new properties. 1.06 The HRA has caused to be prepared modified Plans which are contained in a document entitled "The Richfield Rediscovered Housing Program, Redevelopment Plans and Tax Increment Financing Plans" dated June 20, 1994, and on file with the HRA. Section 2. HRA Approval. 2.01 The HRA finds that the objectives of the HRA in encouraging development and redevelopment within the Project will be advanced by adoption of Modification No. 3 to the Plans. 2.02 The Modification No. 3 to the Plans is hereby approved and adopted by the HRA, subject to review and approval by the Richfield Planning Commission. Section 3. Further Proceeding. 3.01 The Executive Director of the HRA is hereby authorized and directed to transmit copies of the Modification No. 3 of the Plans to the school board of Independent School District No. 280 and the Board of Commissioners of Hennepin County for review and comment and to notify said public bodies of the public hearing to be held on Modification No. 3 to the Plans by the City. 3.02 The HRA requests that the Richfield Planning Commission • review Modification No. 3 and comment regarding the consistency of the modified Plans with the City's comprehensive plan. 3.03 The HRA requests the City to hold the public hearing on Modification No. 3 to the Plans required by Minnesota Statues, section 469.028 and Minnesota Statutes, section 469.175, subd. 3 as soon hereafter as is practicable and recommends that the modified Plans be approved by the City. 3.04 The HRA intends to request that the City from time to time consider various other actions necessary to the implementation of the Modified Plans and pledges its cooperation with the City in achieving the objectives of the Modified Plans. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of June, 1994. Thomas E. Harms, Chairperson 0 Vern Luettinger, Secretary ATTEST: • THE RICHFIELD REDISCOVERED HOUSING PROGRAM REDEVELOPMENT PLANS AND TAX INCREMENT FINANCING • PLANS Housing and Redevelopment Authority in and for the City of Richfield, Minnesota 0 MAYOR Martin J. Kirsch CITY COUNCIL Michael Sandahl, Council Member At Large Susan Rosenberg, Ward I Russ Susag, Ward 2 Donald Priebe, Ward 3 HOUSING AND REDEVELOPMENT AUTHORITY Thomas Harms, Chairperson Joan Helmberger, Vice-Chairperson Vern Luettinger, Secretary Russ Susag, Member Michael Sandahl, Member CITY MANAGER/EXECUTIVE DIRECTOR James D. Prosser PLANNING COMMISSION Daniel Linnihan, Chairperson Kristal. Stokes, Vice Chairperson Timothy Erlander, Secretary Pamela Dmytrenko, Member Michael Gallagher, Member Morris Nilsen, H, Member Thomas Scaglia, Member William Snyder, Member Paul Wasko, Member 0 • CITY STAFF Byron Wallace Director, Community Development Bruce Palmborg Housing & Redevelopment Coordinator Katia Medvetski Redevelopment Specialist Bruce Nordquist Housing Supervisor . Pamela Rohne Housing Specialist 0 CONSULTANTS John B. Dean Ronald L. Batty BRA Legal Counsel Holmes & Graven, Chartered Minneapolis, MN Sidney Inman Mark Ruff Publicorp, Inc. Minneapolis, MN E NOTE TO READER The Richfield Rediscovered Housing Program (the "Housing Program") is organized in cycles based on HRA acquisition and redevelopment activities. The original housing program, initially entitled the "Expanded New Home - Scattered Site Housing Program", established two redevelopment project areas, Project Area A and Project Area B. Within each project area, tax increment financing districts were created based on a list of properties which the HRA would contemplate to acquire and redevelop for the Housing Program. An alpha-numeric organizational system was implemented to the various tax increment districts and subsequent modifications. Redevelopment project areas are represented by an alphabetical letter, either an "A" or "B", while tax increment financing districts are represented by an alpha-numeric combination. The alphabetical component represents the geographical project area and it's numerical component represents the cycle year for which a tax increment district was created. For example, "A-1" is representative of the list of tax increment parcels within redevelopment project area A during the first cycle year of the Housing Program. Subsequent tax increment districts are be labeled as "A- 2" for the second cycle of parcels for the Housing Program, "A-3" for the third, and so on. This also holds true for redevelopment project area B. On June 14, 1993, the City Council approved the HRA's modification to the Housing - Program of 1992. The purpose of this modification was to establish one project area, the Richfield Redevelopment Project Area, composed of various existing project areas and tax increment districts. By doing so, the Richfield Redevelopment Project Area would serve as an umbrella entity and provide greater efficiency in financing redevelopment activity costs while including areas outside of the HRA's operating area. In order to maintain a numerical system to the housing program's modifications, the June 14, 1993 modification is considered to be the second major modification to this housing program. The text contained within the following modified housing program is, therefore, considered to be the modification. Goals and objectives of the overall housing program remain the same. Substantive changes to the housing program include the list of properties identified for acquisition and program implementation and a boundary change for Redevelopment Project Area B. The reader is encouraged to review the original housing program plans and modifications 10 located within the following reference plans: Original Richfield Redevelopment Housing Program (formerly knows as the Master Plan for the Expanded New Home Scattered Site Housing Program) for Redevelopment Project Area "A" and Tax Increment Financing District "A-1" and Redevelopment Project Area "B" and Tax Increment Financing District "B-1" Dated July 16, 1990 Richfield Rediscovered Housing Program Modification No. 1 to the Redevelopment Plan for Redevelopment Project Area "A" and Modification No. I to the Tax Increment Financing Plan • for Tax Increment Redevelopment District "A-I ". and Tax Increment Financing Plan for Tax Increment Redevelopment District "A-2" Dated July 20, 1992 Richfield Rediscovered Housing Program Modification No. 1 to the Redevelopment Plan for Redevelopment Project Area "B" and Modification No. I to the Tax Increment Financing Plan for Tax Increment Redevelopment District "B-1" and Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" Dated July 20,1992 Richfield Redevelopment Project Plan and Tax Increment Financing Plan Dated June 14, 1993 • The Housing and Redevelopment Authority in _and for The City of Richfield, Minnesota Modification No. 3 to the Redevelopment Plan for Redevelopment Project Area "A" Modification No. 1 to the Tax Increment Financing Plan for Tax Increment Redevelopment District "A-2" Tax Increment Financing Plan for Tax Increment Redevelopment District "A-3" 0 All Related to the Richfield Rediscovered Housing Program Dated: June 20, 1994 Prepared By: The City of Richfield Department of Community Development Housing and Redevelopment Division 6700 Portland Avenue South Richfield, MN 55423 (612)861-9760 • Modification No. 3 to the Redevelopment Plan for Redevelopment Project Area "A" 0 is • TABLE OF CONTENTS Part I. Richfield Rediscovered Housing Program Modification No. 3 Redevelopment Plan for Redevelopment Project Area "A" • • PART I - REDEVELOPMENT PLAN Original Plan Page Modification No. 3 Page A. Statement of Public Purpose 1 - - - B. Statutory Authority I C. Description of Redevelopment Project Area 2 - - - D. Statement of Goals and Objectives 3 --- E. Development Activities and Agreements 4 --- F. Proposed Land Use 6 --- G. Acquisition and Relocation Activities 6 A-1 H. Environmental Considerations 7 --- I. Redevelopment Plan Modification 7 - I Administration of Redevelopment Project 7 ... A-i Part I. Modification No. 3 Redevelopment Plan for Redevelopment Project Area "A" E G. Acquisition and Relocation Activities 1. Acquisition As a means of comprehensively formulating Cycle III of the Richfield Rediscovered Housing Program, HRA staff identified property for acquisition in two ways. The first involved contacting and surveying residential property owners that have in the past expressed interest in the voluntary sale of their property. The second involved property owners contacting the HRA requesting that their property be considered for the program. Properties that were considered candidates for the program were then further evaluated for program eligibility and inspected. The following properties are identified for acquisition under Cycle III of the program: PROPERTY ADDRESS PE[) NUMBER 7216 - 1 st Avenue South 34-028-24-13-0094 6616 - 2nd Avenue South* 27-028-2442-0064 6900 - 13th Avenue South .26-028-2443-0073 6321 - 14th Avenue South 26-028-24-12-0093 6500 - 14th Avenue South 26-028-24-13-0132 6928 - 14th Avenue South 26-028-24-43-0069 6404 - 15th Avenue South* 26-028-24-13-0052 6432 - 15th Avenue South 26-028-24-13-0059 6435 - 15th Avenue South 26-028-24-13-0043 6504 - 15th Avenue South 26-028-24-13-0076 7525 Aldrich Avenue South 33-028-24-41-0164 7344 Bryant Avenue South 33-028-24-14-0047 6825 Elliot Avenue South* 26-028-24-34-0085 6828 Elliot Avenue South 26-028-24-34-0135 7525 Girard Avenue South* '33-028-24-42 0094 7537 Girard Avenue South 33-028-24-42-0091 7025 Nicollet Avenue South* 34-028-24-12-0022 6820 Portland Avenue South 27-028-24-44-0006 7211 Portland Avenue South+ 35-028-24-23-0002 7520 Portland Avenue South 34-028-24-41-0021 6608 Stevens Avenue South* 27-028-24-42-0073 6625 Stevens Avenue South 27-028-24-42-0095 *Property moved from Cycle II acquisition list to the Cycle III acquisition list. +Double Lot. A-1 Under Cycle III, the property listed in the following table (formerly part of the Cycle II property list) is hereby removed from the acquisition list for Redevelopment Project Area A. This property may be considered for future program acquisition. (Also note that this property is identified for removal from the list of properties for Tax Increment District "A-2"). PROPERTY ADDRESS PID NUMBER 7416 - 4th Avenue South 34-028-24-41-0053 6525 - 15th Avenue South 26-028-24-13-0110 7432 Aldrich Avenue South 33-028-24-41-0026 6800 Portland Avenue South 27-028-24-44-0001 • 0 A-2 0 Modification No. 1 to the Tax Increment Financing Plan ' for Tax Increment Redevelopment District "A-2" 0 TABLE OF CONTENTS Part II. Richfield Rediscovered Housing Program Modification No. 1 Tax Increment Financing Plan for Tax Increment Redevelopment District "A-2" • PART I - TAX INCREMENT PLAN Original Plan Page Modification No.1 Page A. Statutory Authority 7 --- B. Statement of Objectives 7 --- C. Development Program 7 - - - D. Description of Property in the Tax Increment Financing District 9 A-2-1 E. Classification of the Tax Increment Financing District 9 - - - F. Parcels in Acquisition 10 A-2-1 G. Estimate of Costs 11 - - - H. Estimated Amount of Obligated Funds 11 - - - 1. Sources of Revenue 11 - - - J. Original Tax Capacity 12 - - - K. Estimated Captured Tax Capacity 12 --- L. Duration of the District 12 --- M * Estimated Impact on Other Taxing Jurisdictions 13 - - - N. Modifications of the Tax Increment Financing District 13 - - - 0. Limitation on Administrative Expenses 13 --- P. Limitation on Duration of Tax Increment Financing Districts 13 = - - Q. Limitation on Qualification of Property in Increment District not Subject to Improvement 13 --- R. Limitation of the Use of Tax Increment 14 --- S. Notification of Prior Planned Improvements 14 - - - T. Excess Tax Increment 15 - - - U. Restrictions on Poolin ; Five Year Limit 15 - - - V. Assessment Agreements 17 --- W. Administration of the Tax Increment Financing District and Maintenance of the Tax Increment Account 17 --- X. Annual Disclosure Requirements 18 - - - Y. Assumptions 18 - - - Z. Municipal Findings 18 - - - A-2-i Modification PART 11 - TAX INCREMENT PLAN Original Plan No. 1 Page Page Appendix A: Ma - Redevelopment Project Area "A" 23 --- Appendix B: Property in the Tax Increment Redevelopment District "B-2" 25 Appendix A-2-1 Appendix C: Estimate of Tax Increments 26 --- Appendix D: Tax Increment Financing Budget 27 --- Appendix E: Estimate of Impacts on Other Taxing Jurisdictions 28 - - - 0 • • A-2-ii • C c: Part I. Modification No. I Tax Increment Financing Plan for Tax Increment Redevelopment District "A-2" D. Description of Property in the Tax Increment Financing District The property listed within Appendix B is the final list of property which was acquired for program. purposes. See "Section F. Parcels in Acquisition" below for properties removed from the acquisition list due to unresponsiveness or undesire to further participate in the program. F. Parcels in Acquisition The properties listed below (formerly part of the Cycle II property list) have been identified for removal from the acquisition list and from TIF District "A-2". The removal of this property is a program objective under Cycle III of the Richfield Rediscovered Housing Program. This property may be considered for program acquisition at some future date and incorporated back into the Richfield Rediscovered Program under a separate program modification. . PROPERTY ADDRESS PID NUMBER 7416 - 4th Avenue South 34-028-2441-0053 6525 - 15th Avenue South 26-028-24-13-0110 7432 Aldrich Avenue South 33-028-2441-0026 6800 Portland Avenue South 27-028-24-44-0001 A-2-1 APPENDIX B FINAL LIST OF PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "A-2" PROPERTY ADDRESS PEI) NUMBER ORIGINAL NET TAX CAPACITY* 7112 - 1st Avenue South 28-028-24-12-0096 $1,431 6634 - 4th Avenue South 27-028-2441-0052 $488 7245 - 12th Avenue South 35-028-24-13-0001 $522 6225 - 14th Avenue South 26-028-24-34-0071 $1,011 6844 - 14th Avenue South 26-028-2443-0056 $498 6310 - 15th Avenue South 26-028-24-12-0077 $1,277 7500 Bryant Avenue South 33-028-2441-0106 $1,882 7520 Bryant Avenue South 33-028-24-41-0110 $428 7528 Bryant Avenue South 33-028-24-41-0112 $441 6926 Chicago Avenue South 26-028-24-33-0028 $410 7021 Nicollet Avenue South 34-028-24-12-0023 $535 . *Original net tax capacity shown represents values of record for taxes payable in 1992, as stated in the 1992 plans. 0 Appendix A-2-1 • Tax Increment Financing Plan for Tax Increment Redevelopment District "A-3" is 0 • TABLE OF CONTENTS Part II. Richfield Rediscovered Housing Program Tax Increment Financing Plan for Tax Increment Redevelopment District "A-3" 0 • PART I - TAX INCREMENT PLAN Page No. A. Statutory Authority A-3-1 B. Statement of Objectives A-3-1 C. Development Program A-3-1 D. Description of Property in the Tax Increment Financing District A-3-2 E. Classification of the Tax Increment Financing District A-3-2 F. Parcels in Acquisition A-3-3 G. Estimate of Costs A-3-3 H. Estimated Amount of Obligated Funds A-3-4 L Sources of Revenue A-3-4 J. Original Tax Capacity A-3-4 K. Estimated Captured Tax Capacity A-3-4 L. Duration of the District A-3-5 M. Estimated Impact on Other Taxing Jurisdictions A-3-5- N. Modifications of the Tax Increment Financing District A-3-5 0. Limitation on Administrative Expenses A-3-5 P. Limitation on Duration of Tax Increment Financing Districts A-3-5 Q. Limitation on Qualification of Property in Increment District not Subject to Improvement A-3-5 R. Limitation of the Use of Tax Increment A-3-6 S. Notification of Prior Planned Improvements A-3-6 T. Excess Tax Increment A-3-6 U. Restrictions on Poolin ; Five Year Limit A-3-7 V. Assessment Agreements A-3-9 W. Administration of the Tax Increment Financing District and Maintenance of the Tax Increment Account A-3-9 X. Annual Disclosure Requirements A-3-9 Y. Assumptions A-3-10 Z. Municipal Findings A-3-10 A-3-i PART I I - TAX INCREMENT PLAN Page No. Appendix A: Map -Redevelopment Project Areas "A" and "B" and and Tax Increment Financing Districts "A-3" and "B-3" Ap pendix A-3-1 Appendix B: Property in the Tax Increment Redevelopment District "A-3" Ap pendix A-3-3 Appendix C: Estimate of Tax Increments Ap pendix A-34 Appendix D: Tax Increment Financing Budget A endix A-3-5 Appendix E: Estimate of Impacts on Other Taxing Jurisdictions Ap pendix A-3-6 • A-3-ii 9 Part 11. Tax Increment Financing Plan for Tax Increment Redevelopment District "A-3" A. Statutory Authority The statutory authority for the undertaking of a tax increment financing district (TIF District "A-3") and related Tax Increment Financing Plan (Tax Increment Plan) in Redevelopment Project Area "A" (Project Area A) for the Richfield Rediscovered Housing Program (Housing Program) and the activities proposed in the tax increment plan relating thereto is conferred upon the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (IRA), pursuant to and in accordance with the Tax Increment Financing Act, Minn. Stat., Sec. 469.174 to 469.179, inclusive, as amended. B. Statement of Objectives The HRA and the City continue to seek and affirm the goals and objectives set forth in Part I of the Redevelopment Plan for Redevelopment Project Area "A", dated July 16, 1990 as well as additional program objectives set forth in HRA Letter No. 13, dated April 20, 1992. C. Development Program 1. Description of Development Activities As with previous cycles of the housing program and so with Cycle III, a comprehensive, integrated approach for acquisition, site clearance, and new construction will continue to be provided through program guidelines. The HRA will assist prospective developers, builders, and buyers with development, redevelopment, new construction, and other related activities within the context of the modified Redevelopment Plan for Redevelopment Project Area "A", this Tax Increment Plan, and other related guidelines. 2. Development Activities Covered by Contract At this writing, early negotiations for property acquisitions are proceeding between HRA staff and owners by two, Cycle III properties located in TIF District "A-3". Any and all development contracts which may arise in the interim processing period of these plans, both modified and new, will be contingent upon HRA Board and City Council approval. • A-3-1 3. Other Development Not Under Contract Reasonably Expected to Occur in the • Prr ject. Proposals from prospective developers, builders, and buyers will be required to be submitted to the HRA as part of the review process. The following activities may be expected to occur: 1. Property Acquisition; 2. On-site clearance; 3. On-site improvements; 4. New construction; 5. Remedial site environmental activities; and 6. Adjacent public improvements and utilities which service site. For Cycle III of the Housing Program, a total of 38 properties have been identified for program participation and acquisition. Twenty-two (22) of the properties are located within Redevelopment Project Area "A" while the remaining sixteen (16) are within Redevelopment Project Area ."B". (Refer to Appendix A for map of Redevelopment Project Areas and tax increment parcels.) Redevelopment Project Area A and B each contain one (1) property with a double lot. Property subdivisions will be required for both lots in order to construct two homes on each site. Initial construction for Cycle III is anticipated to begin in the last quarter of 1994. Construction for each home is anticipated to be approximately 150 days. Timing. of construction is contingent upon favorable market conditions, reasonable time period for processing applications and availability of funding revenue. D. Description of Property in the Tax Increment Financing District Property located within TIF District "A-3" is identified in Appendix B. E. Classification of the Tax Increment Financing District The Richfield HRA and City Council, in determining the need for a tax increment financing district in accordance with Minn. Stat., Sec. 469.174 to 469.179, inclusive, as amended, find that Tax Increment District "A-3" to be established within Project Area "A" is a redevelopment tax increment financing district as defined in Minn. Stat., Seca 469.174, subd. 10. Since the tax increment parcels within the scattered site program are non-contiguous, each parcel has been examined by staff against the statutory definitions of structurally substandard and other blight definitions. Each structure has qualified under Minn. Stat., Sec. 469.174, subd. 10. Thus, the tax increment financing district meets the requirements of a redevelopment tax increment financing district. E A-3-2 A detailed account of property examination for eligibility are enumerated within a document entitled "Richfield Rediscovered Housing Program: Blight Qualification Survey - Cycle III" which will be on file at City Hall, Community Development Department, Housing and Redevelopment Division, for the duration of the tax increment district's life. • F. Parcels in Acquisition The following property has been identified for acquisition in Cycle III of the Housing Program: PROPERTY ADDRESS PEI) NUMBER 7216 - I st Avenue. South 34-028-24-13-0094 6616 - 2nd Avenue South* 27-028-24-42-0064 6900 - 13th Avenue South 26-028-24-43-0073 6321 - 14th Avenue South 26-028-24-12-0093 6500 - 14th Avenue South 26-028-24-13-0132 6928 - 14th Avenue South 26-028-2443-0069 6404 - 15th Avenue South* 26-028-24-13-0052 6432 - 15th Avenue South 26-028-24-13-0059 6435 - 15th Avenue South 26-028-24-13-0043 6504- 15th Avenue South 26-028-24-13-0076 7525 Aldrich Avenue South 33-028-2441-0164 7344 Bryant Avenue South 33-028-24-14-0047 6825 Elliot Avenue South* 26-028-24-34-0085 6828 Elliot Avenue South 26-028-24-34-0135 7525 Girard Avenue South* 33-028-2442-0094 7537 Girard Avenue South 33-028-2442-0091 7025 Nicollet Avenue South* 34-028-24-12-0022 6820 Portland Avenue South 27-028-2444-0006 7211 Portland Avenue South+ 35-028-24-23-0002 7520 Portland Avenue South 34-028-24-41-0021 6608 Stevens Avenue South* 27-028-2442-0073 6625 Stevens Avenue South 27-028-24-42-0095 *Property moved from Cycle II acquisition list to the Cycle III acquisition list. +Double Lot. The tax increment district budget includes acquisition costs for land sale subsidy which will be offered to eligible developers, builders, and buyers as development incentives. G. Estimate of Costs The estimate of public costs associated with the tax increment district are outlined in the budget listed in Appendix D. A-3-3 H. Estimated Amount of Obligated Funds At the current time, an additional $700,000 of program revenue is available under Cycle III to continue the housing program. An estimate of the amount of bonded indebtedness for redevelopment is expected to be $0. The term of the issues is 0 years including 0 years of capitalized interest with an anticipated taxable interest rate of 0%. The amount of capitalized interest is estimated to be $0. 1. Sources of Revenue The primary source of revenue to be used to finance public costs associated with proposed developments in the redevelopment project area is an allocation from the development account. In addition to this allocation, other sources of revenue potentially available to the BRA and City may be utilized. J. Original Tax Capacity Pursuant to Minn. Stat., Sec. 469.175, subd. 1 and Sec. 469.177, subd. 1, the Original Net Tax Capacity (OTC) for TIF District "A-3" is based on the January 2, 1992 assessed value placed on the property by the county assessor. The OTC for the district is $14,523. (See Appendix B, Property Located in Tax Increment Financing District "A-3".) Each year the office of the county auditor will measure the amount of increase or decrease in the total net tax capacity of the tax increment district to calculate the tax increment payable to the redevelopment district fund. In any year in which there is an increase in total net tax capacity in the tax increment district above the original net tax capacity, a tax increment will be payable. In any year in which the total net tax capacity in the tax increment district declines below the original net tax capacity, no tax capacity will be captured and no tax increment will be payable. The county auditor shall certify in each year after the date the original net tax capacity was certified, the amount the OTC has increase or decreased as a result of 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; or 3. Change due to stipulations, adjustments, negotiated or court-ordered abatements. K. Estimated Captured Tax Capacity Pursuant to Minn. Stat., Sec. 469.175, Subd. I and Minn. Stat., Sec. 469.177, subd. 2, the estimated captured net tax capacity (CTC) of Tax Increment District "A-3" is within a range of $314 to $1,709 per home. The total CTC for the 23 new homes to be located within Redevelopment Project Area "A" ranges from $7,222 to $39,307. As a result of the improvements to be constructed, it is expected that the estimated captured net tax capacity will be available for the housing program. It is also anticipated that this amount will be captured not more than 25 years. (See Appendix C, Estimate of Tax Increments.) A-3-4 L. Duration of the District Pursuant to Minn. Stat., Sect. 469.176, subd. 1, the maximum duration of a redevelopment tax increment district is 25 years. The HRA elects to capture 100% of the tax increments for the duration of the district. M. Estimated Impact on Other Taxing Jurisdictions Refer to Appendix E, Estimate of Impacts on Other Taxing Jurisdictions. N. Modifications of the Tax Increment Financing District All tax increment plan modifications will be processed in accordance with Minn. Stat., Sec. 469.175, subd. 4. The modifications pertaining to the necessary processing include any reduction or enlargement of the geographic area of the project or tax increment financing district; increase in amount of bonded indebtedness to be incurred, including a determination of capitalized interest on debt if that determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized; increase in the portion of the captured tax capacity to be retained by the HRA; increase in total estimated tax increment expenditures or designation of additional property to be acquired by the HRA shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original plan. The geographic area of a tax increment district may be reduced, but shall not be enlarged after five years following the date of certification of the original tax capacity by the County Auditor. 0. Limitation on Administrative Expenses In accordance with Minn. Stat., Sec. 469.174, subd. 14, and Minn. Stat., Sec. 469.176, subd. 3, for districts for which certification was requested after June 30, 1982, no tax increment shall be used to pay any administrative expenses for a project which exceed ten percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for the project, whichever is less. P. Limitation on Duration of Tax Increment Financing Districts Pursuant to Minn. Stat., Sec. 469.176, subd. 1, the HRA must issue bonds, or acquire property, or construct or cause public improvements to be constructed within three. years of the date of certification of the tax increment district my the county auditor. Q. Limitation on Qualification of Property in Tax Increment District Not Subject to Improvement Pursuant to Minn. Stat., Sec. 469.176, subdivision 6, "if, after four years from the date of certification of the original net tax capacity of the tax increment financing district..., no A-3-5 demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the HRA or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel, and the original net tax capacity of the tax increment'financing district. If the HRA or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the HRA shall certify to the county auditor that the activity has commenced, and the county auditor shall certify the net tax capacity thereof most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district." R Limitation of the Use of Tax Increment All revenues derived from tax increment shall be used in accordance with the tax increment financing plan. The revenues shall be used to finance or otherwise pay public redevelopment costs pursuant to Minn. Stat., 469.001 to 469.047, inclusive, as amended. These revenues shall not be used to circumvent existing levy limit law. No revenues derived from tax increment shall be used for the construction or renovation of a municipally owned building used primarily and regularly for conducting the business of the municipality. This provision shall not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure, a commons area used as a public park or a facility used for social, recreational or conference purposes and not primarily for conducting the business of the municipality. Pursuant to Minn. Stat., Sec. 469.176, subd. 4j, at least 90 percent of the revenues derived from tax increments from a redevelopment district must be used to finance the cost of correcting conditions that allow designation of a redevelopment district under section 469.174. These costs include acquiring properties containing structurally substandard buildings or improvements, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition of structures, clearing of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the authority may be included in the qualifying costs. S. Notification of Prior Planned Improvements Pursuant to Minn. Stat., Sec. 469.177, subd. 4, the HRA will review and search property files for properties to be included in the tax increment district and to identify those properties for which building permits have been issued during the 18 months immediately proceeding approval of the tax increment financing plan by the City. T. Excess Tax Increments Pursuant to Minn. Stat:, Sec. 469.176, subd. 2, in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the tax increment plan, including the A-3-6 amount necessary to cancel any tax levy as provided in Minn. Stat., Sec. 475.61, subd. 3, the BRA shall use the excess amount to: 1. Prepay the outstanding bonds; 2. Discharge the pledge of tax increment therefor; 3. Pay into an escrow account dedicated to the payment of such bond; 4. Repay any loans including interest on these loans; or 5. Return the excess to the county auditor for redistribution to the respective taxing jurisdictions in proportion to their tax capacity rates. The amounts distributed to a city or county must be deducted from the levy limits of the governmental unit for the following year. In calculating the levy limit base for later years, the amount deducted must be treated as a local government aid payment. For the purpose of this tax increment financing plan, excess tax increment means that increment received in any year which is in addition to the amount needed to satisfy the HRA's current financial obligations or commitments, as specified in the tax increment financing budget listed in Appendix D, or which is in addition to that which is placed in a separate account for the purpose of accumulating funds needed to satisfy those financial obligations or commitments in the future. U. Restrictions on Pooling; Five-Year Limit 0 In accordance with Minn. Stat., Sec. 469.1763, the following terms have the meanings given: "Activities" means acquisition of property, clearing of land, site preparation, soils correction, removal of hazardous waste or pollution, installation of utilities, construction of public or private improvements, and other similar activities, but only to the extent that tax increment revenues may be spent for such purposes under other law. Activities do not include allocated administrative expenses, but do include engineering, architectural, and similar costs of the improvements in the district. "Third Party" means an entity other than (1) the person receiving the benefit of assistance financed with tax increments, or (2) the municipality or the development authority or other person substantially under the control of the municipality. Pursuant to Minn. Stat., Sec. 469.1763, subd. 2 with respect to expenditures outside the district: (a) For each tax increment financing district, an amount equal to at least 75 percent of the revenue derived from tax increments paid by properties in the district must be expended on activities in the district or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities in the district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of the revenue derived from tax A-3-7 increments paid by properties in the district may be expended, through a development fund or otherwise, on activities outside of the district but within the defined geographic area of the project except to pay, or secure payment of, debt service on credit enhanced bonds. The revenue derived from tax increments for the district that are expended on costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before calculating the percentages that must be expended within and without the district. Pursuant to Minn. Stat., Sec. 469.173, subd. 3 with respect to the five-year rule: (a) Revenues derived from tax increments are considered to have been expended on an activity within the district under subdivision 2 only if one of the following occurs: (1) before or within five years after certification of the district, the revenues are actually paid to a third party with respect to the activity; (2) bonds, the proceeds of which must be used to finance the activity, are issued and sold to a third party before or within five years after certification and the revenues are spent to repay the bonds; (3) binding contracts with a third party are entered into for performance of the activity before or within five years after certification of the district and the revenues are spent under the contractual obligation; or (4) costs with respect to the activity are paid before or within five years after certification of the district and the revenues are spent to reimburse a party for payment of the costs. (b) For purposes of this subdivision, bonds include subsequent refunding bonds if one of two tests is met: (1) the proceeds of the original refunded bonds were spent on.activities within five years after the district was certified or (2) the original refunded bonds are issued within five years after the district was certified and the proceeds are expended on activities within a reasonable temporary period within the meaning of the use of that term under section 148(c)(1) of the Internal Revenue Code. Pursuant to Minn. Stat., Sec. 469.173, subd. 4 with respect to use of revenues for decertification: Beginning with the sixth year following certification of the district, 75 percent of the revenues derived from tax increments paid by properties in the district that remain after . the expenditures permitted under subdivision 3 must be used only to pay outstanding bonds, as defined in subdivision 3, paragraph (a), clause (2), and paragraph (b) or contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4). When the outstanding bonds have been defeased and when sufficient money has been set aside to pay contractual obligations as defined in subdivision 3, paragraph (a), clauses (3) and (4), the district must be decertified and the pledge of tax increment discharged. A-3-8 V. Assessment Agreements Pursuant to Minn. Stat., Sec. 469.177, subd. 8, the HRA may enter into an agreement in recordable form with a developer or redeveloper of property within the tax increment district which establishes a minimum market value of the tax increment district. The assessment agreement shall be presented to the county assessor who shall review the plans and specifications for the improvements to.be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and so long as the minimum market value contained in the assessment agreement appears in the judgment of the assessor, to be a reasonable estimate, the assessor may certify the minimum market value agreement. W. Administration of the Tax Increment District and Maintenance of the Tax Increment Account Administration of the tax increment district will be the responsibility of the Richfield Housing and Redevelopment Authority. The tax increment received as a result of increases in the net tax capacity of the tax increment district will be maintained in a special account separate from all other HRA and municipal accounts and expended only upon sanctioned activities identified in the tax increment financing plan. X. Annual Disclosure Requirements Pursuant to Minn. Stat., Sec. 469.175, subd. 6a, on or before March 1 of each year, the HRA must annually report to the commissioner of revenue the following: Total principal amount of nondefeased tax increment financing bonds that are outstanding at the end of the previous calendar year; and 2. Total annual amount of principal and interest payments that are due for the current calendar year on (i) general obligation tax increment financing bonds, and (ii) other tax increment financing bonds. Also in accordance with this requirement the HRA must annually report to the commissioner of revenue the following amounts for the tax increment financing district: 1. Type of district; 2. Date on which the district is required to be decertified; 3. Captured net tax capacity of the district, by property class as specified by the commissioner-of revenue, for taxes payable in the current calendar year; • A-3-9 4. Tax increment revenues for taxes payable in the current calendar year; 5. Whether the tax increment financing plan or other governing document permits increment revenues to be expended.(i) to pay bonds, the proceeds of which were or may be expended on activities located outside of the district, (ii) for deposit into a common fund from which money may be expended on activities located outside of the district, or (iii) to otherwise finance activities located outside of the tax increment financing district; and 6. Any additional information that the commissioner of revenue may require. Y. Assumptions It was necessary to make certain assumptions regarding income, costs and timing of the tax increment financing district. These assumptions are based on discussions with the BRA, City, and County staff, and consultants. Z. Municipal Findings Pursuant to Minn. Stat., Sec. 469.175, subd. 3, before or at the time of approval of the tax increment financing plan, the municipality shall make the following findings and shall set forth in writing the reasons and supporting facts for each determination: The Tax Increment Financing District is a redevelopment district pursuant to Minn. Stat., Sec. 469.174, subd. 10. It has been determined that parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities or other improvements and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. Specifically, staff has examined each parcel against the statutory definitions of structurally substandard and other blight definitions due to the non-contiguous nature of the tax increment parcels. Each structure has qualified under Minn. Stat., Sec. 469.174, subd. 10. Thus, the tax increment financing district meets the requirements of a redevelopment tax increment financing district. A detailed account of property examination for eligibility are enumerated within a document entitled Richfield Rediscovered Housing Program: Blight Qualification Survey - Cycle III" which will be on file at City Hall, Community Development Department, Housing and Redevelopment Division., for the duration of the tax increment district's life. 2. The proposed activities listed in this plan, in the opinion of the BRA, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. Therefore, the use of tax increment financing is deemed necessary since the proposed development requires certain necessary planning, property assembly and other improvements without which interested developers, builders, or buyers could not construct the aforementioned improvements; and without • A-3-10 the use of tax increments or other revenues authorized by this plan to assist with the financing of the activities, interested developers, builders, or buyers would not proceed with redevelopment in the redevelopment project area. The tax increment financing plan conforms to the general plan for the development of the City as a whole as it will result in the continuation of the Richfield Rediscovered Housing Program for the development, redevelopment, new construction and other related improvements of residential homes for which there is limited sources of revenue available. 4. The tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development by private enterprise as it will enable the HRA to provide the necessary redevelopment for the project area and City, as a whole, in a planning manner suitable to both the public and private sectors. • A-3-11 • APPENDICES RICHFIELD REDISCOVERED HOUSING PROGRAM REDEVELOPMENT PROJECT AREA "A" AND TAX INCREMENT FINANCING DISTRICT "A-3" • 0 • APPENDIX A MAP REDEVELOPMENT PROJECT AREAS "A" AND "B" AND TAX INCREMENT FINANCING DISTRICTS "A-3" AND "B-3" • Appendix A-3-1 y?Q V cc d z W uj W cc 0 W M U ac ?, s z Ns10NV/s .rZZ is Iz 4110? 41 61 MOll3lONOl 3AV VW030 %I it 14111 I v191 • NOIONIn001Y "ISO VI?1 411 CI rl zl rl I1 • VI OI 101113 0OV31N? II snaNn,o: x Y C,1 otlrlxro 3Ar ONVlltlod II "is YI? NO1NIl1 N N O ? H b b t; r vi :n I In yin L C ? L C n ?p O O. N b .ql ?O O b I 1L :._II _.I )1.-1CiJ 1N N In 1N !n N N N t; l? 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Appdix A-3-2 0 0 • 0 APPENDIX B PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "A-3" • PROPERTY ADDRESS PID NUMBER ORIGINAL NET TAX CAPACITY*" 7216 - 1st Avenue South 34-028-24-13-0094 $ 1,265 6616 - 2nd Avenue South* 27-028-2442-0064 $ 520 6900 - 13th Avenue South 26-028-2443-0073 $ 1,311 6321 - 14th Avenue South 26-028-24-12-0093 $ 610 6500 - 14th Avenue South 26-028-24-13-0132 $ 590 6928 - 14th Avenue South 26-028-2443-0069 $ 500 6404 - 15th Avenue South* 26-028-24-13-0052 $ 470 6432 - 15th Avenue South 26-028-24-13-0059 $ 520 6435 - 15th Avenue South 26-028-24-13-0043 $ 600 6504 - 15th Avenue South 26-028-24-13-0076 $ 570 7525 Aldrich Avenue South 33-028-24-41-0164 $ 570 1 7344 Bryant Avenue South 33-028-24-14-0047 $ 560 6825 Elliot Avenue South* 26-028-24-34-0085 $ 1,380 6828 Elliot Avenue South 26-028-24-34-0135 $ 530 7525 Girard Avenue South* 33-028-2442-0094 $ 550 7537 Girard Avenue South 33-028-24-42-0091 $ 487 7025 Nicollet Avenue South* 34-028-24-12-0022 $ 1,012 6820 Portland Avenue South 27-028-24-44-0006 $ 628 7211 Portland Avenue South+ 35-028-24-23-0002 $ 650 7520 Portland Avenue South 34-028-24-41-0021 $ 350 6608 Stevens Avenue South* 27-028-24-42-0073 $ 360 6625 Stevens Avenue South 27-028-2442-0095 $ 490 TOTAL $14,523 * Property moved from Cycle II acquisition list to the Cycle III acquisition list. **Original tax capacity for taxes assessed in 1993 and payable in 1994 +Double Lot Appendix A-3-3 APPENDIX C ESTIMATE OF TAX INCREMENTS AND PROPERTY TAXES FOR TAX INCREMENT FINANCING DISTRICT "A-3" Tax Increment Estimates and Calculations Lower Limit of Range (Per Home) Upper Limit of Range (Per Home) Construction Cost Land and Building) $ 85,000 $160,000 x Sales Ratio 93% 93% Estimated Market Value $ 79,050 $148,800 x Tax Capacity Ratio (Class IA; Property Type R-Homestead: 1.00% of the first $72,000 of assessed value 2.00% of the balance $ 720 $ 141 $ 720 $ 1,536 New Tax Capacity $ 861 $ 2,256 - Original Net Tax Capacity (Avg.)* $ 547 $ 547 Ca tured Net Tax Capacity $ 314 $ 1,709 x Tax Capacity (Extension) Rate Taxes Payable in 1994 137.3190% 137.3190% Annual Tax Increment $ 431 $ 2,347 x Number of New Program Homes 23 23 Total Gross Annual Tax Increment*" $ 9,917 $53,976 *Assumes non-homestead property net tax capacity to be reclassified as homestead property upon unty's certification of net tax capacity. Estimate ofAd Valorem Upper Limit of Range Lower Limit of Range Pro er Taxes (Per Home) (Per Home) Construction Cost Land and Building) $ 85,000 $160,000 Estimated Market Value $ 79,050 $148,800 x Tax Capacity Ratio (Class I A; Property Type R-Homestead: 1.00% of the first $72,000 of assessed value $ 720 $ 720 2.00% of the balance $ 141 $ 1,536 . New Tax Capacity $ 861 $ 2,256 x Tax Capacity (Extension) Rate Taxes Payable in.1994 137.3190%0 137.3190% Annual Ad Valorem Property Taxes _ $ 1,182 $ 3,098 x Number of New Program Homes 23 23 Gross Total Annual Ad Valorem Property Taxes $ 27,193 $ 71,252 i Appendix A-34 APPENDIX D BUDGET'S TAX INCREMENT FINANCING DISTRICT 91A-3" C 1] Line Item Amount Property uisition $ 1,144,000 Appraisals $ 7,700 Demolition/Site Clearance $ 132,000 Legal Expenses $ 22,000 Total Gross Expenditures $ 1,305,700 *This budget assumes acquisition of all 22 Cycle III properties located within Tax Increment Financing District "A-3". Appendix A-3-5 APPENDIX E • ESTIMATE OF IMPACTS ON OTHER TAXING JURISDICTIONS TAX INCREMENT FINANCING DISTRICT "A-3" The purpose of analyzing impacts on taxing jurisdictions is to (a.) determine how tax increment assistance provided to a proposed redevelopment project impacts taking jurisdictions; (b.) determine the level of impact as it relates to tax base; and (c) determine the amount of taxes a taxing entity would need to levy in order to increase their respective tax base by the amount the project brings in absent the project. If the "But For" test were not met, construction would not occur. That is, without the creation and existence of the tax increment district, construction would not occur because the cost of developing the proposed project by a private developer would be prohibitive. Acceptable rates of return on project investment could not be met and risk would be too high. Development would not move forward. Construction would not occur without the assistance of the city. In light of this, the impact to taxing jurisdictions would be $0. Foregone would be the benefits of a new construction project, increased overall tax base, and other project objectives. The estimated impact of Tax Increment District "A-3" would be as follows if the project were built without tax increment financing: 0 IMPACT ON TAX BASE Range of % Captured Entity's Total Range of Captured Tax Capacity to Taxing Entity Net Tax Ca aci Tax Ca aci Enti Total Hennepin Count 813,900,929 7,222 - 39,307 0.001% - 0.005% City of Richfield 16,794,256 7,222 - 39,307 0.043% - 0.234% School District 280 24,250,257 7,222 - 39,307 0.030% - 0.162% The following table displays captured tax capacity when all construction is completed. The tax rates and tax capacities are the payable 1994 figures for all jurisdictions. The potential taxes column is the estimate of the amount of taxes each jurisdiction would theoretically have to raise if the goal of taxing entities was to raise tax base equal to that of the project without constructing the project. Appendix A-3-6 • • IMPACT ON TAX RATES Taxing Entity Current Tax Rate Range of Captured Tax Ca aci Potential Taxes Hennepin Count 37.441 7,222 - 39,307 $ 2,704 - $14,717 City of Richfield 26.164 7,222 - 39,307 $ 1,890 - $ 10,284 School District 280 66.190 7,222 - 39,307 $ 4,780 - $26,017 Other 7.524 7,222 - 39,307 $ 543 - $ 2,957 Total 137.319 7,222 -39,307 $ 9,917 - $53,976 In addition, the impact on the school district does not include the effect of state aid for education upon school district funding. Appendix A-3-7 The Housing and Redevelopment Authority in and for The City of Richfield, Minnesota Modification No. 3 to the Redevelopment Plan for Redevelopment Project Area "B" Modification No. 1 to the Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" • Tax Increment Financing Plan for Tax Increment Redevelopment District "B-3" All Related to the Richfield Rediscovered Housing Program Dated: June 20, 1994 Prepared By: The City of Richfield Department of Community Development Housing and Redevelopment Division 6700 Portland Avenue South Richfield, MN 55423 (612) 861-9760 0 Modification No. 3 to the Redevelopment Plan for Redevelopment Project Area "B" 0 11 • TABLE OF CONTENTS Part I. Richfield Rediscovered Housing Program Modification No. 3 Redevelopment Plan for Redevelopment Project Area "B" • 0 PART I - REDEVELOPMENT PLAN Original Plan Page Modification No. 3 Page A. Statement of Public Purpose 33 - - - B. Statutory Authority 33 --- C. Description of Redevelopment Project Area 34 B-I D. Statement of Goals and Objectives 35 - - - E. Development Activities and Agreements 36 --- F. Proposed Land Use 38 --- G. Acquisition and Relocation Activities 38 B-2 H. Environmental Considerations 39 --- L Redevelopment Plan Modification 39 - - - J. Administration of Redevelopment Project 39 - - - B-i • Part 1. Modification No. 3 Redevelopment Plan for Redevelopment Project Area "B" C. Description of Redevelopment Project Area Pursuant to Minn. Stat., Sec. 469.029, subd. 6,. the boundary of Project Area "B" is being expanded in order to incorporate additional redevelopment opportunities. The new boundary for Project Area "B" encompasses all that real property within an area described as follows: Beginning at the intersection of the south right-of-way line of State Highway, No. 62 and the east right-of-way line of Oliver Avenue South, thence in a line easterly more of less, along said south right-of-way line to its intersection with the west right-of-way-line of Pleasant Avenue South. Thence southerly along said west right-of-way line to its intersection with the south right-of-way line of West 63rd Street. Thence westerly along said south right-of-way line to its intersection with the west right-of-way.line of Aldrich Avenue South. Thence, southerly along said west right-of-way line to its intersection with the south property line of Lot 4, Block 2, Ray's Lynnhurst Second Addition. Thence, westerly along said south property line, as extended, to its intersection with the east property line of Lot 9, Block 2, Ray's Lynnhurst Second Addition. Thence, southerly along said east property line, as extended, to its intersection with the south property line of Lot 5, Block 2, Ray's Lynnhurst Section Addition. Thence, westerly along said south property line, as extended, to its intersection with the south right-of-way line of Mildred Drive. Thence, westerly more or less, along said south right-of-way line to its intersection with the east right-of-way of Emerson Avenue South. Thence, southerly along said east right-of-way line to its intersection with the north property line of Lot A, Silverwood Second Addition. Thence, easterly along said north property line, as extended, to its intersection with the east property line of Lot A, Silverwood Second Addition. Thence, southerly along said east property line, as extended, to its intersection with the south right-of-way line of West 66th street. Thence, westerly along said south right-of-way line to its intersection with the west right-of-way line of Humboldt Avenue South. Thence, southerly along said west right-of-way line to its intersection with the north right-of-way line of West 69th Street. Thence, westerly along said north right-of-way line to its intersection with the west right-of-way line of Irving Avenue South. Thence, southerly along said west right-of-way line to its intersection with the south right- of-way line of West 72nd Street. Thence, easterly along said south right-of-way line to its intersection with the west right-of-way line of Humboldt Avenue South. Thence, southerly along said west right-of-way line to its intersection with the north right-of-way line of West 73rd Street. Thence, westerly along said north right-of-way line to its intersection with the west right-of-way line of Penn Avenue South. Thence, southerly along said west right-of-way line to its intersection with the north right-of-way line of West 74th Street. Thence, westerly along said north B-1 right-of-way line to its intersection with the west right-of-way line of Sheridan • Avenue South. Thence, southerly along said west right-of-way line to its intersection with the north right-of-way line of West 76th street. Thence, westerly along said north right-of-way line to its intersection with the east right-of-way line of Xerxes Avenue South. Thence, northerly along said east right-of-way line to its intersection with the south right-of-way line of West 66th Street. Thence, easterly along said south right-of-way line to its intersection with the east right-of-way line of Russell Avenue South. Thence, southerly along said east right-of-way line to its intersection with the north property line of Lot 23, Block 2, Tingdale Brothers Lincoln Hills. Thence, easterly along said north property line, as extended, to its intersection with the east property line of Lot 23, Block 2, Tingdale Brothers Lincoln Hills. Thence, southerly along said east property line, as extended, to its intersection with the south right-of-way line of West 67th Street. Thence, easterly along said south right-of-way line to its intersection with the east property line of Lot 24, Block 16, Tingdale Brothers Lincoln Hills. Thence, southerly along said east property line, as extended, to its intersection with the north right-of-way line of West 69th Street. Thence, easterly along said north right-of-way line to its intersection with the east right-of-way line of Penn Avenue South. Thence, northerly along said east right-of-way line to its intersection with the south right- of-way line of West 68th Street. Thence, easterly along said south right-of-way line to its intersection with the east right-of-way line of Oliver Avenue South. Thence, northerly more less, along said east right-of-way line to its intersection with the south property line of Lot 13, Block 11, Ray's Lynnhurst Addition. Thence westerly along said south property line, as extended, to the center line of the alley of Block 12, Ray's Lynnhurst Addition. Thence northerly along said centerline to the south right-of-way line of West 63rd Street. Thence easterly along said south right-of-way line to the east right-of-way line of Oliver Avenue South. Thence northerly along said east right-of-way line to the point of beginning. G. Acquisition and Relocation Activities 1. Acquisition As a means of comprehensively formulating Cycle III of the Richfield Rediscovered Housing Program, HRA staff identified property for acquisition in two ways. The first involved contacting and surveying residential property owners that have in the past expressed interest in the voluntary sale of their property. The second involved property owners contacting the HRA requesting that their property be considered for the program. Properties that were considered candidates for the program were then further evaluated for program eligibility and inspected. The properties which follow are identified for acquisition under Cycle III of the program. U B-2 • PROPERTY ADDRESS PID NUMBER 1908 West 66th Street* 28-028-24-23-0125 6300 Aldrich Avenue South* 28-028-24-11-0041 6404 Humboldt Avenue South 28-028-24-24-0002 6440 Humboldt Avenue South 28-028-24-24-0009 6318 Knox Avenue South 28-028-24-21-0107 6821 Logan Avenue South 28-028-24-34-0050 6845 Newton Avenue South 28-028-24-33-0018 6320 Oliver Avenue South 28-028-24-22-0122 6539 Oliver Avenue South* 28-028-24-23-0092 7015 Penn Avenue South* 33-028-24-22-0003 7021 Penn Avenue South* 33-028-24-22-0004 6236 Pleasant Avenue South 27-028-24-22-0056 6824 Queen Avenue South 29-028-24-44-0024 6933 Queen Avenue South 29-028-24-44-0170 6645 Upton Avenue South* 29-028-24-42-0015 7332 Upton Avenue South+ 32-028-24-13-0059 *Property moved from Cycle II acquisition list to the Cycle III acquisition list. +Double Lot. Under Cycle III, the property listed in the following table (formerly part of the Cycle II property list) is hereby removed from the acquisition list for Redevelopment Project Area B. This property may be considered for future program acquisition. (Also note that this property is identified for removal from the list of properties for Tax Increment District "B-2"). • PROPERTY ADDRESS PID NUMBER 2916 West 71 1/2 Street 32-028-24-12-0072 6924 Newton Avenue South 28-028-24-33-0073 B-3 LJ Modification No. 1 to the Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" • 0 • TABLE OF CONTENTS Part II. Richfield Rediscovered Housing Program Modification No. 1 Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" • 0 PART I - TAX INCREMENT PLAN Original Plan Page Modification No. 1 Page A. Statutory Authority 7 --- B. Statement of Objectives 7 - - - C. Development Program 7 --- D. Description of Property in the Tax Increment Financing District 9 B-2-1 E. Classification of the Tax Increment Financing District 9 - - - F. Parcels in Acquisition 10 B-2-1 G. Estimate of Costs 10 --- H. Estimated Amount of Obligated Funds 10 - - - 1. Sources of Revenue 11 - - - J. Original Tax Capacity 11 - - - _ K. Estimated Captured Tax Capacity 12 --- L. Duration of the District 12 - - - M. Estimated Impact on Other Taxing Jurisdictions 12 - - - N. Modifications of the Tax Increment Financing District 12 --- 0. Limitation on Administrative Expenses 12 --- P. Limitation on Duration of Tax Increment Financing Districts 13 --- Q. Limitation on Qualification of Property in Increment District not Subject to Improvement 13 --- R. Limitation of the Use of Tax Increment 13 --- S. Notification of Prior Planned Improvements 14 --- T. Excess Tax Increment 14 --- U. Restrictions on Poolin ; Five Year Limit 15 --- V. Assessment Agreements 16 - - - W. Administration of the Tax Increment Financing District and Maintenance of the Tax Increment Account 17 --- X. Annual Disclosure Requirements 17 - - - Y. Assumptions 18 --- Z. Municipal Findings 18 - - - B-2-i Modification PART 11- TAX INCREMENT PLAN Original Plan No. 1 Page_ Page Appendix A: Ma - Redevelopment Project Area "A" 23 --- Appendix B: Property in the Tax Increment Redevelopment District "B-2" 25 Appendix B-2-1 Appendix C: Estimate of Tax Increments 26 - - - Appendix D: Tax Increment Financing Budget 27 --- Appendix E: Estimate of Impacts on Other Taxing Jurisdictions 28 - - - • B-2-ii 0 Part I. Modification No. 1 Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" D. Description of Property in the Tax Increment Financing District The property listed within Appendix B is the final list of property which was acquired for program purposes. See "Section F: Parcels in Acquisition" below for properties removed from the acquisition list due to unresponsiveness or undesire to farther participate in the program. F. Parcels in Acquisition The properties listed below (formerly part of the Cycle II property list) have been identified for removal from the acquisition list and from TIF District "B-2". The removal of this property is a program objective under Cycle III of the Richfield Rediscovered Housing Program. This property may be considered for program acquisition at some future date and incorporated back into the Richfield Rediscovered Program under a separate program modification. PROPERTY ADDRESS PID NUMBER 2916 West 71 1/2 Street 32-028-24-12-0072 6924 Newton Avenue South 28-028-24-33-0073 is B-2-1 APPENDIX B FINAL LIST OF PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "B-2" PROPERTY ADDRESS PID NUMBER ORIGINAL NET TAX CAPACM* 6641 Oliver Avenue South 28-028-24-32-0045 $1,254 6912 Oliver Avenue South 28-028-24-33-0053 $655 7124 Washburn Avenue South 32-028-24-12-0073 $530 *Original net tax capacity shown represents values of record for taxes payable in 1992, as stated in the 1992 plans. • Appendix B-2-1 Tax Increment Financing Plan for Tax Increment Redevelopment District "B-3" 0 • TABLE OF CONTENTS Part II. Richfield Rediscovered Housing Program Tax Increment Financing Plan for Tax Increment Redevelopment District "B-3" E • PART I - TAX INCREMENT PLAN Page No. A. Statutory Authority B-3-1 B. Statement of Objectives B-3-1 C. Development Program B-3-1 D. Description of Property in the Tax Increment Financing District B-3-2 E.' Classification of the Tax Increment Financing District B-3-2 F. Parcels in Acquisition B-3-3 G. Estimate of Costs B-3-3 H. Estimated Amount of Obligated Funds B-3-3 1. Sources of Revenue B-34 J. Original Tax Capacity B-34 K. Estimated Captured Tax Capacity B-34 L. Duration of the District B-3-5 M. Estimated Impact on Other Taxing Jurisdictions B-3-5 N. Modifications of the Tax Increment Financing District B-3-5 0. Limitation on Administrative Expenses B-3-5 P. Limitation on Duration of Tax Increment Financing Districts B-3-5 Q. Limitation on Qualification of Property in Increment District not Subject to Improvement B-3-5 R. Limitation of the Use of Tax Increment- B-3-6 S. Notification of Prior Planned Improvements B-3-6 T. Excess Tax Increment B-3-6 U. Restrictions on Poolin ; Five Year Limit B-3-7 V. Assessment Agreements B-3-9' W. Administration of the Tax Increment Financing District and Maintenance of the Tax Increment Account B-3-9 X. Annual Disclosure Requirements B-3-9 Y. Assumptions B-3-10 Z. Municipal Findings B-3-10 B-3-i PART I - TAX INCREMENT PLAN Page No. Appendix A: Map - Redevelopment Project Areas "A" and "B" and and Tax Increment Financing Districts "A-3" and "B-3" Ap pendix B-3-1 Appendix B: Property in the Tax Increment Redevelopment District "B-3" A endix B-3-3 Appendix C: Estimate of Tax Increments Ap pendix B-3-4 Appendix D: Tax Increment Financing Budget A ppendix B-3-5 Appendix E: Estimate of Impacts on Other Taxing Jurisdictions Ap pendix B-3-6 • 0 • B-3-ii . . Part II. Tax Increment Financing Plan for Tax Increment Redevelopment District "B-3" A. Statutory Authority The statutory authority for the undertaking of a tax increment financing district (TIF District "B-3") and related Tax Increment Financing Plan (Tax Increment Plan) in Redevelopment Project Area "B" (Project Area "B") for the Richfield Rediscovered Housing Program (Housing Program) and the activities proposed in the tax increment plan relating thereto is conferred upon the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), pursuant to and in accordance with the Tax Increment Financing Act, Minn. Stat., Sec. 469.174 to 469.179, inclusive, as amended. B. Statement of Objectives The HRA and the City continue to seek and affirm the goals and objectives set forth in Part I of the Redevelopment Plan for Redevelopment Project Area "A", dated July 16, 1990 as well as additional program objectives set forth in HRA Letter No. 13, dated April 20, 1992. 0 C. Development Program 1. Description of Development Activities As with previous cycles of the housing program and so with Cycle III, a comprehensive, integrated approach for acquisition, site clearance, and new construction will continue to be provided through program guidelines. The HRA will assist prospective developers, builders, and buyers with development, redevelopment, new construction, and other related activities within the context of the modified Redevelopment Plan for Redevelopment Project Area "B", this Tax Increment Plan, and other related guidelines. 2. Development Activities Covered by Contract At this writing, there are no executed development contracts for Cycle II properties located in TIF District "B-3". Any and all development contracts which may arise in the interim processing period of these plans, both modified and new, will be contingent upon BRA Board and City Council approval. • B-3-1 3. Other Development Not Under Contract Reasonably Expected to Occur in the • Project. Proposals from prospective developers, builders, and buyers will be required to be submitted to the HRA as part of the review process. The following activities may be expected to,occur: 1. Property Acquisition; 2. On-site clearance; 3. On-site improvements; 4. New construction; 5. Remedial site environmental activities; and 6. Adjacent public improvements and utilities which service site. For Cycle III of the Housing Program, a total of 38 properties have been identified for program participation and acquisition. Twenty-two (22) of the properties are located within Redevelopment Project Area "A" while the remaining sixteen (16) are within Redevelopment Project Area "B". (Refer to Appendix A for map of Redevelopment Project Areas and tax increment parcels.) Redevelopment Project Area A and B each contain one (1) property with a double lot. Property subdivisions will be required for both lots in order to construct two homes on each site. Initial construction for Cycle III is anticipated to begin in the last quarter of 1994. Construction for each home is anticipated to be approximately 150 days. Timing of construction is contingent upon favorable market conditions, reasonable time period for processing applications and availability of funding revenue. D. Description of Property in the Tax Increment Financing District Property located within TIF District "B-3" is identified in Appendix B. E. Classification of the Tax Increment Financing District The Richfield BRA and City Council, in determining the need for a tax increment financing district in accordance with Minn. Stat., Sec. 469.174 to 469.179, inclusive, as amended, find that Tax Increment District "B-3" to be established within Project Area "A" is a redevelopment tax increment financing district as defined in Minn. Stat., Sec. 469.174, subd. 10. Since the tax increment parcels within the scattered site program are non-contiguous, each parcel has been examined by staff against the statutory definitions of structurally substandard and other blight definitions. Each structure has qualified under Minn. Stat., Sec. 469.174, subd. 10. Thus, the tax increment financing district meets the requirements of a redevelopment tax increment financing district. -B-3-2 • A detailed account of property examination for eligibility are enumerated within a document entitled "Richfield Rediscovered Housing Program: Blight Qualification Survey - Cycle III" which will be on file at City Hall, Community Development Department, Housing and Redevelopment Division, for the duration of the tax increment district's life. 0 F. Parcels in Acquisition The following property has been identified for acquisition in Cycle III of the Housing Program: PROPERTY ADDRESS PID NUMBER 1908 West 66th Street* 28-028-24-23-0125 6300 Aldrich Avenue South* 28-028-24-11-0041 6404 Humboldt Avenue South 28-028-24-24-0002 6440 Humboldt Avenue South 28-028-24-24-0009 6318 Knox Avenue South 28-028-24-21-0107 6821 Logan Avenue South 28-028-24-34-0050 6845 Newton Avenue South 28-028-24-33-0018 6320 Oliver Avenue South 28-028-24-22-0122 6539 Oliver Avenue South* 28-028-24-23-0092 7015 Penn Avenue South* 33-028-24-22-0003 7021 Penn Avenue South* 33-028-24-22-0004 6236 Pleasant Avenue South 27-028-24-22-0056 6824 Queen Avenue South 29-028-2444-0024 6933 Queen Avenue South 29-028-2444-0170 6645 Upton Avenue South* 29-028-24-42-0015 7332 Upton Avenue South+ 32-028-24-13-0059 *Property moved from Cycle II acquisiton list to the Cycle III acquisiton list. + Double Lot. The tax increment district budget includes acquisition costs for land sale subsidy which will be offered to eligible developers, builders, and buyers as development incentives. G. Estimate of Costs The estimate of public costs associated* with the tax increment district are outlined in the budget listed in Appendix D. H. Estimated Amount of Obligated Funds At the current time, an additional $700,000 of program revenue is available under Cycle III to continue the housing program. B-3-3 An estimate of the amount of bonded indebtedness for redevelopment is expected to be • $0. The term of the issues is 0 years including 0 years of capitalized interest with an anticipated taxable interest rate of 0%. The amount of capitalized interest is estimated to be $0. A projected cash flow of the overall program reveals that interim program funding could potentially be repaid with interest if sufficient tax increment receipts are available and housing values appreciate. I. Sources of Revenue The primary source of revenue to be used to finance public costs associated with proposed developments in the redevelopment project area is an allocation from the development account. In addition to this allocation of revenue, other sources of revenue potentially available to the HRA and City may be utilized. J. Original Tax Capacity Pursuant to Minn. Stat., Sec. 469.175, subd. 1 and Sec. 469.177, subd. 1, the Original Net Tax Capacity (OTC) for TIF District "B-3" is based on the January 2, 1992 assessed value placed on the property by the county assessor. The OTC for the district is $11,446. (See Appendix B, Property Located in Tax Increment Financing District 'B-3".) Each year the office of the county auditor will measure the amount of increase or decrease in the total net tax capacity of the tax increment district to calculate the tax increment payable to the redevelopment district fund. In any year in which there is an increase in total net tax capacity in the tax increment district above the original net tax capacity, a tax increment will be payable. In any year in which the total net tax capacity in the tax increment district declines below the original net tax capacity, no tax capacity will be captured and no tax increment will be payable. The county auditor shall certify in each year after the date the original net tax capacity was certified, the amount the OTC has increase or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; or 3. Change due to stipulations, adjustments, negotiated or court-ordered abatements. K. Estimated Captured Tax Capacity Pursuant to Minn. Stat., Sec. 469.175, Subd. I and Minn. Stat., Sec. 469.177, subd. 2, the estimated captured net tax capacity (CTC) of Tax Increment District "B-3" is within a range of $284 to $1,679 per home. The total CTC for the 17 new homes to be located.within Redevelopment Project Area "B" ranges from $4,828 to $28,543. As a result of the improvements to be constructed, it is expected that the estimated captured net tax capacity will be available for the housing program. It is also anticipated that this amount will be captured not more than 25 years. (See Appendix C, Estimate of Tax Increments.) i B-3-4 L. Duration of the District Pursuant to Minn. Stat., Sect. 469.176, subd. 1, the maximum duration of a redevelopment tax increment district is 25 years. The HRA elects to capture 100% of the tax increments for the duration of the district. M. Estimated Impact on Other Taxing Jurisdictions Refer to Appendix E, Estimate of Impacts on Other Taxing Jurisdictions. N. Modifications of the Tax Increment Financing District All tax increment plan modifications will be processed in accordance with Minn. Stat., Sec. 469.175, subd. 4. The modifications pertaining to the necessary processing include any reduction or enlargement of the geographic area of the project or tax increment financing district; increase in amount of bonded indebtedness to be incurred, including a determination of capitalized interest on debt if that determination was not a part of the original plan, or to increase or decrease the amount of interest on the debt to be capitalized; increase in the portion of the captured tax capacity to be retained by the HRA; increase in total estimated tax increment expenditures or designation of additional property to be acquired by the HRA shall be approved upon the notice . and after the discussion, public hearing and findings required for approval of the original plan. The geographic area of a tax increment district may be reduced, but shall not be enlarged after five years following the date of certification of the original tax capacity by the County Auditor. 0. Limitation on Administrative Expenses In accordance with Minn. Stat., Sec. 469.174, subd. 14, and Minn. Stat., Sec. 469.176, subd. 3, for districts for which certification was requested after June 30, 1982, no tax increment shall be used to pay any administrative expenses for a project which exceed ten percent of the total tax increment expenditures authorized by the tax increment financing plan or the total tax increment expenditures for the project, whichever is less. P. Limitation on Duration of Tax Increment Financing Districts Pursuant to Minn. Stat., Sec. 469.176, subd. 1, the HRA must issue bonds, or acquire . property, or construct or cause public improvements to be constructed within three years of the date of certification of the tax increment district my the county auditor. Q. Limitation on Qualification of Property. in Tax Increment District Not Subject to Improvement Pursuant to Minn. Stat., Sec. 469.176, subdivision 6, "if, after four years from the date of • certification of the original net tax capacity of the tax increment financing district..., no B-3-5 demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the HRA or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel, and the original net tax capacity of the tax increment financing district. If the HRA or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to.that parcel, in accordance with the tax increment financing plan, the BRA shall certify to the county auditor that the activity has commenced, and the county auditor shall certify the net tax capacity thereof most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district." IL Limitation of the Use of Tax Increment All revenues derived from tax increment shall be used in accordance with the tax increment financing plan. The revenues shall be used to finance or otherwise pay public redevelopment costs pursuant to Minn. Stat., 469.001 to 469.047, inclusive, as amended. These revenues shall not be used to circumvent existing levy limit law. No revenues derived from tax increment shall be used for the construction or renovation of a municipally owned building used primarily and regularly for conducting the business of the municipality. This provision shall. not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure, a commons area used as a public park or a facility used for social, recreational . or conference purposes and not primarily for conducting the business of the municipality. Pursuant to Minn. Stat., Sec. 469.176, subd. 4j, at least 90 percent of the revenues derived from tax increments from a redevelopment district must be used to finance the cost of correcting conditions that allow designation of a redevelopment district under section 469.174. These costs include acquiring properties containing structurally substandard buildings or improvements, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition of structures, clearing of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the authority may be included in the qualifying costs. S. Notification of Prior Planned Improvements Pursuant to Minn. Stat., Sec. 469.177, subd. 4, the HRA will review and search property files for properties to be included in the tax increment district and to identify those properties for which building permits have been issued during the 18 months immediately proceeding approval of the tax increment financing plan by the City. T. Excess Tax Increments Pursuant to Minn. Stat., Sec. 469.176, subd. 2, in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the tax increment plan, including the B-3-6 amount necessary to cancel any tax levy. as-;provided in Minn. Stat., Sec. 475.6 1, subd. 3, the HRA shall use the excess amount to: 1. Prepay the outstanding bonds, 2. Discharge the pledge of tax increment therefor; 3. Pay into an escrow account dedicated to the payment of such bond; 4. Repay any loans including interest on these loans; or 5. Return the excess to the county auditor for redistribution to the respective taxing jurisdictions in proportion to their tax capacity rates. The amounts distributed to a city or county must be deducted from the levy limits of the governmental unit for the following year. In calculating the levy limit base for later years, the amount deducted must be treated as a local government aid payment. For the purpose of this tax increment financing plan, excess tax increment means that increment received in any year which is in addition to the amount needed to satisfy the HRA's current financial obligations or commitments, as specified in the tax increment financing budget listed in Appendix D, or which is in addition to that which is placed in a separate account for the purpose of accumulating funds needed to satisfy those financial obligations or commitments in the future. U. Restrictions on Pooling; Five-Year Limit • In accordance with Minn. Stat., Sec. 469.1763, the following terms have the meanings given: "Activities" means acquisition of property, clearing of land, site preparation, soils correction, removal of hazardous waste or pollution, installation of utilities, construction of public or private improvements, and other similar activities, but only to the extent that tax increment revenues may be spent for such purposes under other law. Activities do not include allocated administrative expenses, but do include engineering, architectural, and similar costs of the improvements in the district. "Third Party" means an entity other than (1) the person. receiving the benefit of assistance financed with tax increments, or (2) the municipality or the development authority or other person substantially under the control of the municipality. Pursuant to Minn. Stat., Sec. 469.1763, subd. 2 with respect to expenditures outside the district: (a) For each tax increment financing district, an amount equal to at least 75 percent of the revenue derived from tax increments paid by properties in the district must be expended on activities in the district or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities in the district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of the revenue derived from tax B-3-7 increments paid by properties in the district may be expended, through a development fund • or otherwise, on activities outside of the district but within the defined geographic. area of the project except to pay, or secure payment of, debt service on credit enhanced bonds. The revenue derived from tax increments for the district that are expended on costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before calculating the percentages that must be expended within and without the district. Pursuant to Minn. Stat., Sec. 469.173, subd. 3 with respect to the five-year rule: (a) Revenues derived from tax increments are considered to have been expended on an activity within the district under subdivision 2 only if one of the following occurs: (1) before or within five years after certification of the district, the revenues are actually paid to a third party with respect to the activity; (2) bonds, the proceeds of which must be used to finance the activity, are issued and sold to a third party before or within five years after certification and the revenues are spent to repay the bonds; (3) binding contracts with a third party are entered into for performance of the activity before or within five years after certification of the district and the revenues are spent under the contractual obligation; or (4) costs with respect to the activity are paid before or within five years after certification of the district and the revenues are spent to reimburse a party for payment of the costs. (b) For purposes of this subdivision, bonds include subsequent refunding bonds if one of two tests is met: (1) the proceeds of the original refunded bonds were spent on activities within five years after the district was certified or (2) the original refunded bonds are issued within five years after the district was certified and the proceeds are expended on activities within a reasonable temporary period within the meaning of the use of that term under section 148(c)(1) of the Internal Revenue Code. Pursuant to Minn. Stat., Sec. 469.173, subd. 4 with respect to use of revenues for decertification: Beginning with the sixth year following certification of the district, 75 percent of the revenues derived from tax increments paid by properties in the district that remain after the expenditures permitted under subdivision 3 must be used only to pay outstanding bonds, as defined in subdivision 3, paragraph (a), clause (2), and paragraph (b) or contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4). When the outstanding bonds have been defeased and when sufficient money has been set aside to pay contractual obligations as defined in subdivision 3, paragraph (a), clauses (3) and (4), the district must be decertified and the pledge of tax increment discharged. B-3-8 • V. Assessment Agreements Pursuant to Minn. Stat., Sec. 469.177, subd. 8, the HRA may enter into an agreement in recordable form with a developer or redeveloper of property within the tax increment district which establishes a minimum market value of the tax increment district. The assessment agreement shall be presented to the county assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and so long as the minimum market value contained in the assessment agreement appears in the judgment of the assessor, to be a reasonable estimate, the assessor may certify the minimum market value agreement. W. Administration of the Tax Increment District and Maintenance of the Tax Increment Account Administration of the tax increment district will be the responsibility of the Richfield Housing and Redevelopment Authority. The tax increment received as a result of increases in the net tax capacity of the tax increment district will be maintained in a special account separate from all other HRA and municipal accounts and expended only upon sanctioned activities identified in the tax increment financing plan. X. Annual Disclosure Requirements Pursuant to Minn. Stat., Sec. 469.175, subd. 6a, on or before March 1 of each year, the BRA must annually report to the commissioner of revenue the following: 1. Total principal amount of nondefeased tax increment financing bonds that are outstanding at the end of the previous calendar year; and 2. Total annual amount of principal and interest payments that are due for the current calendar year on (i) general obligation tax increment financing bonds, and (ii) other tax increment financing bonds. Also in accordance with this requirement the HRA must annually report to the commissioner of revenue the following amounts for the tax increment financing district: 1. Type of district; 2. Date on which the district is required to be decertified; • 3. Captured net tax capacity of the district, by property class as specified by the commissioner of revenue, for taxes payable in the current calendar year; B-3-9 4. Tax increment revenues for taxes payable in the current calendar year; Whether the tax increment financing plan or other governing document permits increment revenues to be expended (i) to pay bonds, the proceeds of which were or may be expended on activities located outside of the district, (ii) for deposit into a common fund from which money may be expended on activities located outside of the district, or (iii) to otherwise finance activities located outside of the tax increment financing district; and 6. Any additional information that the commissioner of revenue may require. Y. Assumptions It was necessary to make certain assumptions regarding income, costs and timing of the tax increment financing district. These assumptions are based on discussions with the ERA, City, and County staff, and consultants. Z. Municipal Findings Pursuant to Minn. Stat., Sec. 469.175, subd. 3, before or at the time of approval of the tax increment financing plan, the municipality shall make the following findings and shall set forth in writing the reasons and supporting facts for each determination: 1. The Tax Increment Financing District is a redevelopment district pursuant to Minn. Stat., Sec. 469.174, subd. 10. It has been determined that parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities or other -improvements and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. Specifically, staff has examined each parcel against the statutory definitions of structurally substandard and other blight definitions due to the non-contiguous nature of the tax increment parcels. Each structure has qualified under Minn. Stat., Sec. 469.174, subd. 10. Thus, the tax increment financing district meets the requirements of a redevelopment tax increment financing district. A detailed account of property examination for eligibility are enumerated within a document entitled Richfield Rediscovered Housing Program: Blight Qualification Survey - Cycle III" which will be on file at City Hall, Community Development Department, Housing and Redevelopment Division, for the duration of the tax increment district's life. 2. The proposed activities listed in this plan, in the opinion of the BRA, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. Therefore, the use of tax increment financing is deemed necessary since the proposed development requires certain necessary planning, property assembly and other improvements without which interested developers, builders, or buyers could not construct the aforementioned improvements; and without B-3-10 . the use of tax increments or other revenues authorized by this plan to assist with the financing of the activities, interested developers, builders, or buyers would not proceed with redevelopment in the redevelopment project area. 3. The tax increment financing plan conforms to the general plan for the development of the City as a whole as it will result in the continuation of the Richfield Rediscovered Housing Program for the development, redevelopment, new construction and other related improvements of residential homes for which there is limited sources of revenue available. 4. The tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development by private enterprise as it will enable the HRA to provide the necessary redevelopment for the project area and City, as a whole, in a planning manner suitable to both the public and private sectors. • • B-3-11 • APPENDICES RICHFIELD REDISCOVERED HOUSING PROGRAM REDEVELOPMENT PROJECT AREA "B" AND TAX INCREMENT FINANCING DISTRICT "B-3" • • • APPENDIX A MAP REDEVELOPMENT PROJECT AREAS "All AND follft AND TAX INCREMENT FINANCING DISTRICTS "A-3" AND "B-3" 0 v Appendix B-3-1 N N ? ? u? I N y, i ° f c c N A - ' ti Si Y b •1 V ? b b b ' IISION9IS -'?-- 11. 11 I 22 I`_ ll JI?. _.I' II I.IZ [?I•?L 11 V102 O Cl_ I f ? -"??I ` t' S:. v rii sn rii n >n [---ICJC-II I__ . II g a ` 4161 w r n- r w •N 1-il?, II I 1 - w._ oll3lONOl M _- -7.7 • 1 _.___ .- 304tlr03?II=? --11.10 - 41x1 __ 4111 1 - - -- . II 'I-.-JUL_...1 III' 11-.II. _-II_-II II II II ? 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N• O h ? n w w w e • • APPENDIX B PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "B-3" 0 • PROPERTY ADDRESS PID NUMBER ORIGINAL NET TAX CAPACITY" 1908 West 66th Street* 28-028-24-23-0125 $ 486 6300 Aldrich Avenue South* 28-028-24-11-0041 $ 550 6404 Humboldt Avenue South 28-028-24-24-0002 $ 660 6440 Humboldt Avenue South 28-028-24-24-0009 $ 1,196 6318 Knox Avenue South 28-028-24-21-0107 $ 550 6821 Logan Avenue South 28-028-24-34-0050 $ 580 6845 Newton Avenue South 28-028-24-33-0018 $ 630 6320 Oliver Avenue South 28-028-24-22-0122 $ 560 6539 Oliver Avenue South* 28-028-24-23-0092 $ 975 6236 Pleasant Avenue South 27-028-24-22-0056 $ 600 7015 Penn Avenue South* 33-028-24-22-0003 $ 605 7021 Penn Avenue South* 33-028-24-22-0004 $ 605 6824 Queen Avenue South 29-028-24-44-0024 $ 380 6933 Queen Avenue South 29-028-24-44-0170 $ 1,030 6645 Upton Avenue South* 29-028-2442-0015 $ 1,219 7332 Upton Avenue South+ 32-028-24-13-0059 $ 820 TOTAL $11,446 * Property moved from Cycle II acquisition list to the Cycle III acquisition list. **Original tax capacity for taxes assessed in 1993 and payable in 1994 +Double Lot Appendix B-3-3 APPENDIX C • ESTIMATE OF TAX INCREMENTS AND PROPERTY TAXES FOR TAX INCREMENT FINANCING DISTRICT "B-3" Tax Increment Estimates and Calculations Lower Limit of Range (Per Home) Upper Limit of Range (Per Home) Construction Cost Land and Building) $ 85,000 $160,000 x Sales Ratio 93% 93% Estimated Market Value $ 79,050 $148,800 x Tax Capacity Ratio (Class IA; Property Type R-Homestead: 1.00% of the first $72,000 of assessed value 2.00% of the balance $ 720 $ 141 $ 720 $ 1,536 New Tax Capacit_y $ 861 $ 2,256 - Original Net Tax Capacity (Avg.)* $ 577 $ 577 Captured Net Tax Capacity $ 284 $ 1,679 x Tax Capacity (Extension) Rate Taxes Payable in 1994 137.3190% 137.3190% Annual Tax Increment $ 390 $ 2,306 x Number of New Program Homes 17' 17 Total Gross Annual Tax Increment" $ 6,630 $39,195 *Assumes non-homestead property net tax capacity to be reclassified as homestead property- upon County's certification of net tax capacity. Estimate of Ad Valorem Upper Limit of Range Lower Limit of Range Pro er Taxes (Per Home) (Per Home) Construction Cost Land and Building) $ 85,000 $160,000 Estimated Market Value $ 79,050 $148,800 x Tax Capacity Ratio (Class IA; Property Type R-Homestead: 1.00% of the first $72,000 of assessed value $ 720 $ 720 2.00% of the balance $ 141 $ 1,536 New Tax Capacity $ 861 $ 2,256 x Tax Capacity (Extension) Rate Taxes Payable in 1994 137.3190% .137.3190% Annual Ad Valorem Property Taxes $ 1,182 $ 3,098 x Number of New Program Homes 17 17 Gross Total Annual Ad Valorem Property Taxes $ 20,099 $ 52,665 Appendix B-3-4 • APPENDIX D BUDGET* TAX INCREMENT FINANCING DISTRICT "B-3" • • Line Item Amount Property uisition $ 822,000 Appraisals $ 5,600 Demolition/Site Clearance $ 84,000 Legal Expenses $ 16,000 Total Gross Expenditures $ 937,600 *This budget assumes acquisition of all 16 Cycle III properties located within Tax Increment Financing District "B-3". Appendix B-3-5 APPENDIX E • ESTIMATE OF IMPACTS ON OTHER TAXING JURISDICTIONS TAX INCREMENT FINANCING DISTRICT "B-3" The purpose of analyzing impacts on taxing jurisdictions is to (a.) determine how tax increment assistance provided to a proposed redevelopment project impacts taxing jurisdictions; (b.) determine the level of impact as it relates to tax base; and (c.) determine the amount of taxes a taxing entity would need to levy in order to increase their respective tax base by the amount the project brings in absent the project. If the "But For" test were not met, construction would not occur. That is, without the creation and existence of the tax increment district, construction would not occur because the cost of developing the proposed project by a private developer would be prohibitive. Acceptable rates of return on project investment could not be met and risk would be too high. Development would not move forward. Construction would not occur without the assistance of the city. In light of this, the impact to taxing jurisdictions would be $0. Foregone would be the benefits of a new construction project, increased overall tax base, and other project objectives. The estimated impact of Tax Increment District "B-3" would be as follows if the project were built without tax increment financing: IMPACT ON TAX BASE Range of % Captured Entity's Total Range of Captured Tax Capacity to Taxing Entity Net Tax Capacity Tax Capacity Enti Total Hennepin Count 813,900,929 45828 - 28,543 0.001% - 0.004% City of Richfield 16,794,256 4,828 - 28,543 0.029% - 0.170% School District 280 24,250,257 4,828 - 28,543 0.020% - 0.118% The following table displays captured tax capacity when all construction is completed. The tax rates and tax capacities are the payable 1994 figures for all jurisdictions. The potential taxes column is the estimate of the amount of taxes each jurisdiction would theoretically have to raise if the goal of taxing entities was to raise tax base equal to that of the project without constructing the project. E Appendix B-3-6 • • U IMPACT ON TAX RATES Taxing Entity Current Tax Rate Range of Captured Tax Ca aci Potential Taxes Hennepin Count 37.441 4,828 - 28,543 $ 1,808 - $10,687 City of Richfield 26.164 4,828 - 28,543 $ 1,263 - $ 7,468 School District 280 66.190 4,828 - 28,543 $ 3,196 - $18,893 Other 7.524 4,828 - 28,543 $ 363 - $ 2,148 Total 137.319 4,828 - 28,543 $ 6,630 - $39,195 In addition, the impact on the school district does not include the effect of state aid for education upon school district funding. Appendix B-3-7 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 44 Agenda June 20, 1994 Issue Statement: Approval of a contract with W. D. Schock Company for inspection services. Background: Schock has asked the HRA if it would be willing to contract with Schock to provide replacement dwelling inspection services under a contract to properties located within the City of Richfield. The significant points to be included in a contract are attached. As occupants of homes being purchased in New Ford Town and Rich Acres find relocation homes, the dwellings must be decent, safe and sanitary (dss). An inspection determines if dss conditions exist. The inspections are very similar to those undertaken for the Section 8 program. They must be undertaken specifically for relocation purposes to comply with regulations. (The existing inspection programs of the City don't satisfy the relocation regulations.) Recommended Motion: Adopt a motion which approves a contract between Schock and the HRA. Basis of Recommendation: 1. The HRA has personnel trained in providing this type of inspection. 2. Staff will be able to handle the additional work load. 3. Payment will be on the basis of $55 per unit inspected. This is the market rate and would adequately cover our cost'of services. 4. This activity would provide additional revenue to the HRA. 5. Legal counsel has reviewed the contract and finds it to be acceptable. Alternative Recommendation: 1. Not enter into the proposed contract for services. 2. Modify the proposed contract.for services. Discussion/Decision Mode: With approval of the contract concept, a document will be drafted and presented to the Executive Director and Chair for signature. (Schock has been utilizing a private contractor to do all dss inspections including those in Richfield.) submitted, James D Prosser Execu a Director JDP:ds • Contract Considerations 1. The contract would be between W. D. Schock and the HRA. 2. The contract may be cancelled by either party with 30 days notice. 3. Compensation will be at $55 per unit paid monthly. 4. The purpose of the contract is for the HRA to accomplish dss inspections for NFT/RA relocatees. 11