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07-20-92 agendaCITY OF RICHFIELD MONDAY, JULY 20, 1992 HOUSING AND REDEVELOPMENT AUTHORITY 7:00 P.M. COUNCIL CHAMBERS AGENDA CALL TO ORDER APPROVAL OF MINUTES OF REGULAR HRA MEETING OF MAY 18, 1992 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF MODIFICATION IN COMPENSATION TO THE HRA COMMISSIONERS FOR MEETING ATTENDANCE HRA LETTER NO. 18 3. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6407 15TH AVENUE TO MARLIN GRANT HOMES, INC., IN ACCORDANCE WITH DEVELOPMENT AGREEMENT HRA LETTER NO. 19 4. CONSIDERATION OF RESOLUTION APPROVING MODIFICATION TO REDEVELOPMENT PLANS AND ADOPTION OF TAX INCREMENT FINANCING PLANS FOR RICHFIELD REDISCOVERED PROGRAM; REQUESTING RICHFIELD CITY COUNCIL TO CONDUCT PUBLIC HEARINGS THEREON; RECOMMENDING APPROVAL OF PLANS HRA LETTER NO. 20 5. EXECUTIVE DIRECTOR REPORT 6. CLAIMS AND PAYROLL ADJOURNMENT HOUSING AND REDEVELOPMENT AUTHORITY • HRA Letter No. 20 Agenda July 20, 1992 Issue Statement: Approval of Modification No. 1 to the Richfield Rediscovered Redevelopment and Tax Increment Financing Plans; and the establishment of three program elements: Market Rate Initiatives, Modest Cost Initiatives and Builder Initiatives. Background: In April 1992, the City Council, at the request of the HRA, appropriated $500,000 for the continuation of the Richfield Rediscovered Program which will be known as Phase II. The proposed 1992 Richfield Rediscovered would accomplish the following: demolish approximately nine substandard homes on properties valued by the Hennepin County Assessor at $435,000; provide ten homes (one site is a double lot) valued at a minimum of approximately $1,080,000 and generate an estimated $270,000 in land proceeds. Tax increments generated by the new housing development over a 25 year period would provide the balance of the revenue to repay the $500,000. A Publicorp analysis indicates the Phase II program is feasible. Maintaining assumptions consistent with those in Phase I, the $500,000 is projected to be repaid in 25 years. Revenues could exceed expenditures by as much as $165,000. Phase I continues to show a positive projected balance. To implement the program, the following must be considered by the HRA: ? The Redevelopment Plan; ? The Tax Increment Financing Plan; and ? The referral of these documents to the Planning Commission and City Council for their consideration. A summary of the plans are provided. The complete document follows the summary. The HRA must also consider the new program elements introduced later in this letter. A program time schedule is attached. During May and June, staff: ? contacted approximately 60 property owners that had indicated an interest in selling during the last year; ? identified approximately 46 of the 60 property owners that had • a continued interest in selling at this time; • ? inspected the 46 sites to determine program eligibility, identified approximately 32 eligible properties; ? excluded the remaining 14 properties for various reasons, such as: being in good repair (4 homes), being a substantial home needing significant repair (3), withdrawing from program participation (4), and sale for substantial rehabilitation (1). Two offered properties were not within the development district boundary. The Redevelopment and Tax Increment Financing Plan identifies the 32 eligible properties. Given that the resources available from the HRA and City Council at this time are limited and approximately nine properties are anticipated for purchase (to make 10 redevelopment sites), 23 properties would remain. The estimated budget for the nine properties is as follows: Property Acquisition $435,500 Appraisals 2,925 Demolition/Site Clearance 45,000 Legal Expenses 2,700 $486,125 Contingency 13,875 $500,000 Rather than simply not dealing with the remaining 23 properties, staff has incorporated ideas recently expressed by the HRA into Richfield Rediscovered, thus broadening its purpose to better meet community needs. To accomplish this, it is proposed that Richfield Rediscovered be expanded to three divisions or program elements: Market Rate Initiatives; Modest Cost Initiatives; and Builder Initiatives. Market Rate Initiatives represents the present program; coordinated redevelopment by a seller, HRA, builder and end buyer. A substandard property provides a site for a new market rate home valued at $85,000 and above. The HRA role is to identify substandard property voluntarily offered by a seller, acquire the property with a subsequent sale to a builder/buyer team. The HRA also provides the necessary writedown between the value at time of acquisition from a seller and the value as a vacant site to a builder. The nine sites the HRA is anticipated to acquire, yielding 10 development sites, requires an average subsidy of $23,000 (expenses minus proceeds divided by 10). The subsidy is determined on the basis of a number of factors including lot size and home value. Modest Cost Initiatives provides an opportunity to coordinate redevelopment by a voluntary seller, a non-profit entity such as Habitat for Humanity, and the HRA. Habitat becomes the builder, finds a qualified buyer with an income less than 50 percent of • median income, and provides a new home valued at $75,000 to $85,000. The subsidy provided by the HRA approximates $51,000 per property. The non-profit typically requires the land cost to be $1. Outside grant funds are needed to provide this subsidy. The HRA is presently competing for federal HOME Investment Partnership Program monies to initiate two projects in 1992. (The application for these funds was discussed in HRA Memorandum No. 15 dated June 12.) Four of the Richfield Rediscovered voluntary site offerings are well suited to support new homes valued at $75,000 to $85,000. Sites not used by Habitat would be considered for Vo-Tech modest cost housing initiatives. Builder Initiatives provides an opportunity for the HRA to facilitate voluntary linkages between sellers and builders. Approximately, 19 of the 32 sites would be available in the 1992 program. Nine sites would be acquired by the HRA for Market Initiatives and four others are available for Modest Cost Initiatives. From time to time, builders have been able to acquire substandard properties without subsidy (or HRA involvement). The builder spends approximately $25,000 to $30,000 to acquire a site with a substandard structure, clears it and then develops a new single family home valued at $100,000 and up. With seller agreement, the HRA could offer sites to interested builders withy no subsidy. Builders could negotiate a sales price directly, and purchase, clear and develop the site for a buyer. Sites offered to the HRA suitable for inclusion in this element of the 1992 program have Hennepin County Assessor values ranging from $36,000 to $67,000. Thus, a seller concession (subsidy) of between $6,000 and $37,000 would likely be required. In some instances, sellers may deem these concessions appropriate given the cost of repairing substandard housing conditions and the need for the seller to market their property. Each situation will be unique. In other instances, the seller will prefer to wait for the HRA program; some sellers have a higher confidence level (particularly the elderly) in securing a fair deal from the HRA. Some can't afford to make the value concessions a builder may propose. For these Builder Initiative properties, the HRA will have no oversight concerning construction, construction completion or housing design. If the HRA concurs, the Planning Commission on July 28, 1992 will be requested to consider resolutions which find the redevelopment and tax increment finance plans and the proposed acquisition and disposition of property by the HRA to be in conformance with the Comprehensive Plan. In as much as these plan documents are very similar to those of the Phase I program, a favorable response is anticipated. The City Council, following a public hearing which would be scheduled for August 24, 1992, would consider the redevelopment and tax increment finance plans. Hennepin County and the Richfield School District will be notified of the public hearing as required by law. Recommended Motion: 1. Adopt the attached resolution which: A. Approves the redevelopment plans A and B, and the TIF plans A-2 and B-2; identified as Modification No. 1. However, it is understood that this approval authorizes staff to make the following corrections in the plan documents; 6608 Stevens Avenue is listed in the B project and district and should be in the A project and district, 6612 Second Avenue should be 6616 Second Avenue on page 25 of the A documents. It is correctly listed on pages 3 and 10 of the A documents. B. Requests the Planning Commission to review the modified Redevelopment and Tax Increment Plans and find the plan and property acquisitions to be in conformance with the Comprehensive Plan. C. Requests the City Council to: i) hold a public hearing on August 24, 1992 at which time the modified redevelopment and TIF Plans would be considered; and ii) approve the plans. 2. Adopt a motion which approves the previously discussed new • program elements; Market Rate Initiatives, Modest Cost Initiatives and Builder Initiatives. Basis of Recommendation:. 1. Richfield Rediscovered is a proven redevelopment program. Qualifying redevelopment sites have been identified within an area specified in a Redevelopment Plan originally approved in 1990. 2. The Planning Commission is required to review the 1992 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 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. With the addition of Modest Cost and Builder Initiative program elements to the Market Rate Initiative a more comprehensive response to seller, builder and buyer needs will be possible. 6. A source of funding is available for the Market Rate • Initiative; and a funding application has been submitted for a grant to assist with the implementation of a Modest Cost Initiative. 7. A cash flow analysis indicates that the program . continues to be self supporting excluding staff costs which are covered by the New Home Program. 8. Existing staff resources are available to administer the program. 9. 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: An objective of this program is to make it possible for developers to initiate construction in late 1992. To do so, it is necessary to adopt the proposed resolution on July 20, 1992. Res fully submitted, • Jam Prosser Exe u ive Director JDP:ds 40 HRA RESOLUTION NO. • THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION APPROVING MODIFICATION TO THE REDEVELOPMENT PLANS AND ADOPTION OF TAX INCREMENT FINANCING PLANS FOR THE RICHFIELD REDISCOVERED PROGRAM; REQUESTING THE RICHFIELD CITY COUNCIL TO CONDUCT PUBLIC HEARINGS 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 (HRA) has identified areas within the City as being in need of development, redevelopment, and construction of new single family homes in order to provide families and individuals living in a substandard, poor quality environment an opportunity to move to standard housing by establishing a cash market for their existing housing and to provide an opportunity for Richfield to accommodate families currently residing in Richfield or elsewhere who are seeking larger housing units with features popular in today's market. • 1.02 The HRA has previously approved and the City Council of the City of Richfield (City) has previously approved the.creation and establishment of Redevelopment Project Area.A and Redevelopment Project Area B and Tax Increment.Financing District A-1 and Tax Increment Financing District B-1. 1.03 The HRA has concluded that certain modifications are necessary to the plans for Redevelopment Project Area A. and Redevelopment Project Area B and Tax Increment Financing Plan A-1 and Tax Increment Financing Plan B-1 and that the establishment of new Tax Increment Financing District A-2 and Tax Increment Financing District B-2 is necessary. 1.04 The HRA has caused to be prepared a modified Redevelopment Plan for Project Area A, modified Redevelopment Plan for Project Area B, modified Plan for Tax Increment District A-1 and modified Plan for Tax Increment District B-1, Tax Increment Financing Plan for Tax Increment District A-2 and Tax Increment Financing Plan for Tax Increment District B-2, dated July 20, 1992, all relating to the Richfield Rediscovered Program (collectively, Plans), which Plans are on file with the HRA. 1.05 The Executive Director of the HRA is hereby authorized and directed to transmit copies 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 the Plans on August 24, 1992 by the City. • 1.06 The Richfield Planning Commission is hereby requested to review the Plans and to make a determination whether the Plans are consistent with the plans for development of the City as a whole. Section 2. HRA Approval. 2.01 The HRA finds that the objective of encouraging development, redevelopment, and new construction within the Project Areas will be advanced by adoption of the Plans. 2.02 The Plans are hereby approved and adopted by the HRA. 2.03 Staff is directed to formulate procedures which will result in implementation of the Richfield Rediscovered Program. Section 3. Further Proceeding. 3.01 The HRA requests the City to hold the public hearing on the Plans required by Minn. Stat. Section 469.028 and Minn. Stat. Section 469.175, subd. 3 at its meeting of August 24, 1992, and recommends that the Plans be approved by the City. Section 4. Financing. 04.01 The HRA intends to request that the City assist from time to time in financing the public redevelopment costs identified in the TIF Plans by a loan payable from capital proceeds from land sale and tax increment from the TIF Districts and other revenues. 4.02 The HRA intends to pay interest on the borrowed funds if the cash flow from the TIF Districts is sufficient after the payment of principal. 4.03 The HRA also intends to request that the City from time to time consider various other actions necessary to facilitate the implementation of the Plans and pledges its cooperation with the City in achieving the objectives of the Plans. Adoption by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of July, 1992. Thomas E. Harms, Chairperson ATTEST: 0 Joan Helmberger, Secretary ACTIVITY HRA Meeting Review Redevelopment Plan . Tax Increment Finance Plan (TIF) Expanded Program Elements Request of Planning Commission Find Redevelopment and TIF Plans in conformance with Comprehensive Plan including acquisition and disposition of real estate RICHFIELD REDISCOVERED; 1992 TIME AND EVENTS SCHEDULE TIME FRAME July 20, 1992 Request City Council to hold public hearing and approve Plans • Planning Commission Meeting Findings regarding Plan Conformance (See above) HRA Meeting July 28, 1992 August 17, 1992 Authorize entering into agreements to purchase with sellers, contingent on City Council Public Hearing and plan approval City Council Public hearing on Redevelopment and TIF Plans and consideration of proposal to approve the Plans. HRA Authorization Purchase Property Sell Property Developer Agreement n LJ Construction Start (120 day construction period per house). August 24, 1992 Starting in October, 1992 and continuing until sites are purchased and sold Last quarter of 1992 continuing into 1993 Richfield Rediscovered . Redevelopment and Tax Increment Plans Summary The activities will be conducted from within two redevelopment projects known as Redevelopment Project Area "A" and Redevelopment Project Area "B" (see page 24 in document A or page 24 in document B for a map both of which are the same. These areas were established in 1990.) Each redevelopment project area will have a tax increment district, Tax Increment Redevelopment District "A-2" and Tax Increment Redevelopment District "B-2" respectively. Each district will be composed of any of the 32 parcels on which redevelopment takes place. They are listed on pages 3 and 10 in "A" documents (20 parcels) and pages 3 and 10 in the "B" documents (12 parcels). The only parcels which could become part of district "A-2" and "B-2", would be those listed. No property will be purchased by the HRA which is not listed. Although all the owners of property listed expressed interest in selling, it is likely that negotiations will not be satisfactorily concluded with all the owners. Thus, not all property listed will be purchased. The balance of the Plan documents are similar to those previously reviewed and approved by the HRA and City Council for this program. A few of the more significant features of the documents are briefly identified as follows. is Because the activities in each project area are the same, the documents for Redevelopment Project Area "A" and "B" are the same except the "Description of the Redevelopment Project Area" (boundary description); and "Acquisition and Relocation Activities" (list of properties to be considered for purchase). The documents for Tax Increment Redevelopment Districts "A-2" and "B-2" are the same except for "Parcels in Acquisition" (list of properties to be considered for purchase), "Original Tax Capacity", "Estimated Captured Tax Capacity" and the "Appendices". Objectives are listed on page 7 of the "-A" document. They are the same in all documents. The budgets for each project area appear in the Appendices and total $1,142,900 for project "A-2" page 27. The budget assumes the HRA would purchase all 20 properties in the plan. However, only four would be purchased in Phase II. For project "B-2", the budget totals $633,900 on page 27. However, only five of the 12 properties would be purchased in Phase II. The proposal is to create year life. The increment generated from the proper, bonds would be issued. A perusal of the Table of plan document "B" pages i two TIF redevelopment districts with a 25 captured by the two districts would be that ty on which new homes were constructed. No Contents in plan document "A" pages i-v and will reveal a full listing of all topics. The Housing and Redevelopment Authority in and for The City of Richfield, Minnesota Modification No. 1 To The Redevelopment Plan for Redevelopment Project Area "A" Modification No. 1 To The Tax Increment Financing Plan for Tax Increment Redevelopment District "A-1 " Tax Increment Financing Plan for Tax Increment Redevelopment District "A-2" All Related To The Richfield Rediscovered Housing Program Dated: July 20, 1992 PREPARED BY. The City of Richfield Department of Community Development Housing and Redevelopment Division 6700 Portland Avenue South Richfield, MN 55423 (612) 861-9760 MAYOR MARTIN J. KIRSCH CITY COUNCIL William Bullock Ivan Ludeman Michael Sandahl Kristal Stokes • HOUSING AND REDEVELOPMENT AUTHORITY Thomas Harms, Chair Joan Helmberger Ivan Ludeman Vern Luettinger Larry Wozniczka CITY MANAGER/EXECUTIVE DIRECTOR James D. Prosser is PLANNING COMMISSION William Snyder, Chair Nancy Edwardson Robert Elliott Timothy Erlander Michael Gallagher Dania/ Linnihan Morris Nilsen, // Thomas Scaglia David Sumnicht CITY STAFF E Byron Wallace Director, Community Development John Dean HRA Attorney Ronald Batty HRA Attorney Bruce Palmborg Housing & Redevelopment Coordinator Bruce Nordquist Housing Supervisor Catherine Jones Housing Specialist Kathy Jablonsky Redevelopment Specialist 11 TABLE OF CONTENTS Part 1. Modification No. 1 Redevelopment Plan for Redevelopment Project Area "A" Original Modification Plan No.1 Page No. Page No. Note To Reader --- (vi) A. Statement of Public Purpose 1 B. Statutory Authority 1 --- C. Description of Redevelopment Project Area. 2 --- D. Statement of Goals and Objectives 3 E. Development Activities and Agreements 4 1 F. Proposed Land Use 6 2 G. Acquisition and Relocation Activities 6 2 H. Environmental Considerations 7 --- I. Redevelopment Plan Modification. 7 --- J. Administration of Redevelopment Project 7 --- • (i) TABLE OF CONTENTS P ll art . Modification No. 1 Tax Increment Financing Plan for Tax Increment Redevelopment District "A-1 " Original Modification Plan No.1 Page No. Page No. A. Statutory Authority 9 --- B. Statement of Objectives 9 --- C. Development Program 9 --- D. Description of Property in the Tax Increment Financing District 10 5 E. Classification of the Tax Increment Financing District 10 --- F. Parcels In Acquisition 12 5 G. Estimate of Costs 12 --- H. Estimated Amount of Obligated Funds. 13 --- I. Sources of Revenue 13 --- J. Original Tax Capacity 13 --- K. Estimated Captured Tax Capacity 14 --- L. Duration of the District 14 --- M. Estimated Impact on Other Taxing Jurisdictions. 14 --- N. Modifications of the Tax Increment Financing District 14 --- 0. Limitation on Administrative Expenses 14 --- P. Limitation on Duration of Tax Increment Financing Districts 15 --- • (ii) • Original Modification Plan No.1 Page No. Page No. Q. Limitation on Qualification of Property in Increment District not Subject to Improvement. 15 --- R. Limitation of the Use of Tax Increment 15 --- S. Notification of Prior Planned Improvements 16 --- T. Excess Tax Increments 16 --- U. Restrictions on Pooling; Five-Year Limit. 17 --- V. Assessment Agreements 18 --- W. Administration of the Tax Increment Financing District and Maintenance of the Tax Increment Account 19 --- X. Annual Disclosure Requirements. 19 --- Y. Assumptions 20 --- Z. Municipal Findings 20 --- A endixA: Ma : R d l t P t A A 25 --- pp p e eve opmen rojec rea Appendix B: Property in the Tax Increment Redevelopment District "A-1" 27 6 Appendix C. Estimate of Tax Increments. 28 --- Appendix D: Tax Increment Financing Budget. 29 --- Appendix E. Estimate of Impacts on Other Taxing Jurisdictions 30 --- 0 (iii) Table of Contents t l1L P ar Tax Increment Financing Plan for Tax Increment Redevelopment District "A-2" Page No. A. Statutory Authority 7 B. Statement of Objectives 7 C. Development Program 7 D. Description of Property in the Tax Increment Financing District 9 E. Classification of the Tax Increment Financing District 9 F. Parcels In Acquisition 10 G. Estimate of Costs 11 H. Estimated Amount of Obligated Funds. 11 I. 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 (iv) Page No. Notification of Prior Planned Im rovements 14 p T. Excess Tax Increments 15 U. Restrictions on Pooling; 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 APPENDICES. 21 Appendix A: Map: Redevelopment Project Area "A" and "B" and Tax Increment Financing Districts "A-2" and "B-2". 23 04p pendix B: Property in the Tax Increment Redevelopment District "A-2" 25 Appendix C. Estimate of Tax Increments. 26 Appendix D: Tax Increment Financing Budget. 27 Appendix E. Estimate of Impacts on Other Taxing Jurisdictions 28 E (v) NOTE TO READER The following text represents modification to the Richfield Rediscovered Housing Program, formerly known as the Expanded New Home - Scattered Site Housing Program. Changes to the Redevelopment Plan for Redevelopment Project Area "A" and Tax Increment Financing Plan for Tax Increment Financing District "A-1" are identified under the section titled Modification No. 1 to the Redevelopment Plan for Redevelopment Project Area "A" (Redevelopment Plan) and Modification No. 1 to the Tax Increment Financing Plan for Tax Increment Redevelopment District "A-1" (Tax Increment Plan). Only those areas of the Redevelopment Plan and Tax Increment Plan requiring revision are incorporated in this first modification. The Tax Increment Financing Plan for Tax Increment District "A-2" (Tax Increment Plan) represents a new plan, not a modification. The modified Redevelopment Plan and the new Tax Increment Plan both represent a continuation of the goals and objectives set forth in the original Redevelopment Plan and Tax Increment Plan. Generally, the substantive changes to the housing program under the modification and new Tax Increment Plan include broadening the opportunity for program participantion and identifying additional acquisition property. To understand all of the program modifications and proposed activities, a review of the original Redevelopment Plan, Tax Increment Plans, and other related documents, dated July 16, 1990, is recommended. • (vi) Part 1. Modification No. 1 Redevelopment Plan for Redevelopment Project Area "A" E. Development Activities and Agreements The objectives of this redevelopment plan will be accomplished pursuant to the authority granted to the HRA by the Housing and Redevelopment Authorities Act, Minn. Stat., Sec. 469.001, et seq. The following activities are appropriate for the area. Description of Anticipated Public Development Activities The anticipated public development activities in the redevelopment project area to be undertaken by the HRA and City in order to support the private development activities include: 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. Description of Anticipated Private Development Activities The private development activities within the project area which are anticipated to occur include: 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. -1- Any and all proposals for development and redevelopment will be reviewed by the HRA and City, when appropriate, to determine conformance with the redevelopment plan and applicable municipal ordinances and codes. Property acquired by the HRA will be subject to-a contract. for sale to an interested developer, builder, or buyer. The general requirements to be imposed upon an interested developer, builder, or buyer by the contract for sale are: 1. To redevelop the property purchased in accordance with this redevelopment plan; 2. To commence and complete the construction of improvements on the property within specified periods of time; 3. Not to resell the property before improvements are made without the prior consent of the HRA; and 4. Not to discriminate on the basis of age, race, color, sex, creed, or national origin on the sale, lease, transfer, or occupancy of the property purchased from the HRA. F. Proposed Land Use The current land uses in the redevelopment project area include the following: - Single family residential; - Apartment; - Duplex; - Commercial; - Parks; - Schools; - Vacant; - Public; - Quasi-public (e.g. churches, cemetery, nursing homes, private schools, and service organizations); and - Water. New uses will be restricted to single family residential. G. Acquisition and Relocation Activities 1. Acquisition As a means of comprehensively formulating Cycle II of the Richfield Rediscovered Housing Program, HRA staff recently undertook the following tasks to identify property for acquisition: a. Survey residential property owners that have expressed interest in the voluntary sale of their property in Cycle II of the Richfield Rediscovered Housing Program. E 11 0 -2- b. Evaluate properties for program eligibility. The following property is identified for acquisition for Cycle II of the program: ADDR ESS PID NUMBER 7500 Bryant Ave. 33-028-24-41-0106 7520 Bryant Ave. 33-028-24-41-0110 7528 Bryant Ave. 33-028-24-41-0112 6926 Chicago Ave. 26-028-24-33-0028 6616 - 2nd Ave. 27-028-24-42-0064 6844 - 14th Ave. 26-028-24-43-0056 7112 - 1st Ave. 34-028-24-12-0096 7245 - 12th Ave. 35-028-24-13-0001 7525 Girard Ave. 33-028-24-42-0094 6634 -,4th Ave. 27-028-24-41-0052 7021 Ni ll t A 34 028 24 12 0023 co e ve. - - - - 6310 - 15th Ave. 26-028-24-12-0077 6225 - 14th Ave. 26-028-24-12-0071 6825 Elliot Ave. 26-028-24-34-0085 6404 - 15th Ave. 26-028-24-13-0052 6525 - 15th Ave. 26-028-24-13-0110 7432 Aldrich Ave. 33-028-24-41-0026 6800 Portland Ave. 27-028-24-44-0001 7416 - 4th Ave. 34-028-24-41-0053 7025 Nicollet Ave. 34-028-24-12-0022 For Cycle II program purposes, the following Cycle I property is removed from the acquisition li st. This property may be considered for program acquisition at some future date. ADDRESS PID NUMBER 6351 Bloomington Ave. 26-028-24-11-0024 6332 15th Ave. 26-028-24-12-0083 -3- ADDRESS 6349 14th Ave. 6325 15th Ave. 6400 15th Ave. 6507 Bloomington Ave. 7435 Emerson Ave. 7039 5th Ave. 7216 1st Ave. PID NUMBER 26-028-24-12-0087 26-028-24-12-0114 26-028-24-13-0051 26-028-24-14-0116 33-028-24-42-0014 34-028-24-11-0079 34-028-24-13-0094 • • -4- Part ll. Modification No. 1 Tax Increment Financing Plan . for Tax Increment Redevelopment District "A-1 " D. Description of Property in the Tax Increment Financing District The property listed within Appendix B has been identified for removal from TIF District "A-1". This property may be considered for acquisition at some time in the future. F. Parcels in Acquisition The following property has been identified for removal from the acquisition list. This property may be considered for acquisition at some time in the future. PIN NUMBER ADDRESS 26-028-24-11-0024 6351 Bloomington Ave. So. 26-028-24-12-0083 6332 - 15th Ave. So. 26-028-24-12-0087 6349 - 14th Ave. So. 26-028-24-12-0114 26-028-24-13-0051 26-028-24-14-0116 33-028-24-42-0014 6325 - 15th Ave. So. 6400 - 15th Ave. So. 6507 Bloomington Ave. So. 7435 Emerson Ave. So. 34-028-24-11-0079 34-028-24-13-0094 • 7039 - 5th Ave. So. 7216 - 1st Ave. So. -5- APPENDIX B PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "A-1" The following property, known as Cycle I property and listed within the Tax Increment Finaning Plan for Tax Increment Financing District "A-2", is hereby removed from Tax Increment Financing District "A-1". The removal of this property is a program objective under Cycle II of the Richfield Rediscovered Housing Program, known as the Expanded New Home - Scattered Site Housing Program under the original Plan. This property may be considered for acquisition at some future date. ORIGINAL NET PIN NUMBER ADDRESS TAX CAPACITY* 26-028-24-11-0024 6351 Bloomington Ave. So. $ 547 26-028-24-12-0083 6332 - 15th Ave. So. $ 1,506 26-028-24-12-0087 6349 - 14th Ave. So. $ 1,458 26-028-24-12-0114 6325 - 15th Ave. So. $ 1,611 26-028-24-13-0051 6400 - 15th Ave. So. $ 513 26-028-24-14-0116 6507 Bloomington Ave. So. $ 541 33-028-24-42-0014 7435 Emerson Ave. So. $ 469 34-028-24-11-0079 7039 - 5th Ave. So. $ 528 34-028-24-13-0094 7216 - 1st Ave. So. $ 1,584 Total $ 8,757 *Original Net Tax Capacity for taxes payable in 1990. • -6- Part Ill. Tax Increment Financing Plan for Tax Increment Redevelopment District "A-2" A. Statutory Authority The statutory authority for the undertaking of a tax increment financing district (TIF District "A-2") and related Tax Increment Financing Plan (Tax Increment Plan) in Redevelopment Project Area "A" (Project Area "A") for the Richfield Rediscovered Housing Program formerly known as the Expanded New Home - Scattered Site 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 seek to achieve the goals and objectives set forth in Part I of the Redevelopment Plan for Redevelopment Project Area "A", dated July 16, 1990. In addition to these goals and objectives, program objectives set forth in HRA Letter No. 13, dated April 20, 1992, are as follows: - Create a voluntary market for the purchase and removal of substandard, poor quality housing. - Provide sites for new homes by working closely with a qualified builder/buyer team. - Provide a continuing program presence which maintains the interest and market momentum already achieved. - Provide a financial structure which generates a sufficient cash flow to pay off principal and provide interest payments if funds are available. C. Development Program 1. Description of Development Activities On January 16, 1990, the.HRA adopted a motion directing staff to proceed with the formulation of the Expanded New Home Program. On April 20, 1992, the HRA passed a motion to authorize continuation of this program, currently named the Richfield Rediscovered Housing Program. A survey of purchasers of new homes involved in the original housing program (Cycle I) provided information on the success -7- of the program. The following observations.were made with respect to Cycle I and addressed in HRA Letter No. 13: a. The program has met the needs of various buyers which include young families, empty nesters, singles, move- up buyers, and first-time home buyers. b. The permanent bedroom count added to the housing supply in the city is 25. c. Relatively few school-aged children are involved with the newly acquired housing units. Therefore, confidence exists that the increase in dwelling unit size will result in a new increase in school-aged children when all the new units are occupied. d. During the first quarter of 1992, approximately 60 sellers and 15 buyers have indicated interest in participating in a continued program. Sellers, builders, and buyers continue to contact HRA staff to indicate program interest and participation. As with Cycle I of the program and so with Cycle II, a comprehensive, integrated approach for acquisition, site clearance, and new construction was formulated and 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 Currently, there are no development contracts. 3. Other Development Not Under Contract Reasonablv Exnected 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; -8- 5. Remedial site environmental activities; and 6. Adjacent public improvements and utilities which service site. For Cycle II of the Housing Program, a total of.32 properties have been identified for program participation and acquisition. Twenty (20) of the properties are located within Redevelopment Project Area "A" while the remaining twelve (12) are within Redevelopment Project Area "B". (Refer to Appendix A for map of Redevelopment Project Areas.) Redevelopment Project Area B contains one property with a double lot. A property subdivision will be required in order to construct two homes on site. Initial construction for Cycle II is anticipated to begin in the last quarter of 1992. Construction for each home is anticipated to be approximately 120 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-2" 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-2" 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. A detailed account of property examination for eligibility are enumerated within a document entitled "Richfield Rediscovered Housing Program: Blight Qualification Survey - Cycle II" 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. • -9- F. Parcels in Acquisition The following property has been identified for acquisition in Cycle II of the Housing Program: ADDRESS PID NUMBER 7500 Bryant Ave. 33-028-24-41-0106 7520 Bryant Ave. 33-028-24-41-0110 7528 Bryant Ave. 33-028-24-41-0112 6926 Chicago Ave. 26-028-24-33-0028 6616 - 2nd Ave. 27-028-24-42-0064 6844 - 14th Ave. 26-028-24-43-0056 7112 - 1st Ave. 34-028-24-12-0096 7245 - 12th Ave. 35-028-24-13-0001 7525 Girard Ave. 33-028-24-42-0094 6634 - 4th Ave. 27-028-24-41-0052 7021 Nicollet Ave. 34-028-24-12-0023 6310 - 15th Ave. 26-028-24-12-0077 6225 - 14th Ave. 26-028-24-12-0071 6825 Elliot Ave. 26-028-24-34-0085 6404 - 15th Ave. 26-028-24-13-0052 6525 - 15th Ave. 26-.028-24-13-0110 7432 Aldrich Ave. 33-028-24-41-0026 6800 Portland Ave. 27-028-24-44-0001 7416 - 4th Ave. 34-028-24-41-0053 7025 Nicollet Ave. 34-028-24-12-0022 For Cycle II program purposes, the following Cycle I property is removed from the acquisition list. This property may be considered for acquisition at some future date. 0 -10- • • • ADDRESS 6351 Blooi 6332 15th 6349 14th 6325 15th 6400 15th nington Ave. Ave. Ave. Ave. Ave. 6507 Bloomington Ave. 7435 Emerson Ave. 7039 5th Ave. 7216 1st Ave. PID NUMBER 26-028-24-11-0024 26-028-24-12-0083 26-028-24-12-0087 26-028-24-12-0114 26-028-24-13-0051 26-028-24-14-0116 33-028-24-42-0014 34-028-24-11-0079 34-028-24-13-0094 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 $500,000 is available under Cycle II to continue the housing program. Repayment of these funds will be through the use of tax increment financing and other sources of revenue, if any, available to the HRA and City. 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 cashflow analysis 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 tax increment. In addition to the tax increment -11- 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 "A-2" is based on the January 2, 1992 assessed value placed on the property by the county assessor. The OTC for the district is $14,714. (See Appendix B, Property Located in Tax Increment Financing District "A-2".) 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 increased 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. 1 and Minn. Stat., Sec. 469.177, subd. 2, the estimated captured net tax capacity (CTC) of the tax increment district is within a range of $117 to $764 per home. The total CTC for 20 new homes within the project area ranges from $2,340 to $15,280. As a result of the improvements to be constructed, it is expected that the estimated captured net tax capacity will be available for the housing program. It is also anticipated that this amount will be captured not more than 25 years. (See Appendix C, Estimate of Tax Increments). L. Duration of the District Pursuant to Minn. Stat., Sect. 469.176, subd. 1, the maximum duration of a redevelopment tax increment district is 25 years. The HRA elects to capture 100$ of the tax increments for the duration of the district. 0 -12- 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 by 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 demolition, rehabilitatiori or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service -13- 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 that parcel shall be excluded from 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 on 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 preceding approval of the tax increment financing plan by the City. -14- 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 amount necessary to cancel any tax levy as provided in Minn. Stat., Sec. 475.61, 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, -15- 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 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. -16- (b) For purposes of this subdivision, bonds include 0 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. 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 land and completed improvements for the duration 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. -17- 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: 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; 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 HRA, 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 -18- 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 II" 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 HRA, 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 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, formerly known as the Expanded New Home - Scattered Site Housing Program for the development, redevelopment, new construction and other related improvements of -19- 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. • E -20- APPENDICES Richfield Rediscovered Housing Program Redevelopment Project Area "A" and Tax Increment Financing District "A-2" • -21- (Intentionally Lett Blank) is • E -22- 0 APPENDIX A MAP REDEVELOPMENT PROJECT AREA "A AND "B" • • -23- • V V Y 10 V I r r '-? Y I I Y. ?_ 2 01 ?1 1 > {+ v 14102 Ol(??I(--: I I s ! E 'E E E E. z 1161 1-1( _ ?L -) I I ]) Q .^. it r". R0 _ f-l? ?II..yII?? • I I MOII)lDNOI - 11 , 1 , _ _ ?p„7/?MOI )AS 4V07) II ll II II II ? ' ,( '1 ?.. am VIVO)) II II II II I'. r' Y1/I I l It I "sit I I ,' 1 rl,l ? II li II it II .I 11 ll I ? ? , .1,1 I II li III II II II II ?• . II l?l _ I _- II )i__ ;? NO, GMIl/OO,Y "°""' II ll 11 .) II II I `' I it ]1 II 71 -- -] gist _ )I _ ? 11 II 1 ?I ?I rlfl 11=11- 11 1111 II 11 11 II 11 II .1 l\? 11 )I __)I I aft -]I JI . 11 II ll II II ii II if : II 11- )( _.) N a )1 11 )' -?!------- II II II 1 ! ? ? I ]I I II 1I-- 1I- •,') to 11 • .. , - ]I II II I '41. I II I ll _ 11 _ 11 --] ;?1 a n III 1101 ll II • II I ' I II 1 II 11 J( 1 1101 101113 ' i W II II II II II 11 I _ II I !0111) OIt, I«, II II ) 11 v. j ?'r DDr ?IN? W ll it I! II 11 JI .__ ] )i II JI 1 sne..nlo:) .! srwwn,oD rr.d I. I 11 - II II II -? II ll - J -]I •- -)I -JI ? 1 ;,? ,r.d ! ' ! II II II ll II ?_- ]i-- 11-1- II___) ON.,71.D I ,I,I , , ' - II II I? 3At ONt II If II 11mod - / -3Ar ONrllrOd nC I 11-:?Ri is •1. _- _._. J ?.._? -? II .....I _ JI - II - .II _ ;1 111 Hf -._.II _,. I., I==? ? r, • MOINI,J? it II ]I -11 ll ]I - JI .J -? Inf" II - N0/Ml» ]I II II y ---)I-I-: ] I? ]I ,-- -?1 - Pit 11 -_3 W II-[-- I -? ..t 1 11 1_--I w.z ]I-' I ?,,,,- I 11 =11 =? a if --]I- . I _) - 6N N)A71L ?. \ `•- I X11 • _ : I U ;' ? PI 1 ?_J( ?f--=11 __ ! I ll ,.1 11 _-3 ,u -]I . - ' --J -•?'r . 3nt 13110DiN I; -- , 3A11 1711001N 11 UI_1? 'I 11 I 1 ._?_ PO if N1110w1.13l. N1/10M.1N7r? 11 I 1 11 11 I _ _ _ ? 1 -- ArnrS,lid •rnrS1,10 ? lwtSt31e II - = I- .I - INTSV31d ONtrD I1' I JI-I1 1i If II I it i li` 3 i I1 pII _ --?I I ;I 0"110 171rYt« 111 -)I JI I& II I _-ll J i 11 11 ( t 1 M111f?.i - JI -_] I- - -I I yl 131rrtN )I 1 l r I I L i. II ] II 7 0131Jb119 I} ! I II II II J' 0131/rrO )AT )1110"11 )At 311ON11 I I? 11 -?I II `I` ?? _ I II 1 !a 11 LrE • - N »M /NOdno (7 1MOdn0 01066131,13 01066131,13 - 1/lonwJ ?. •i l . ? or11no lo,oYNnw I ?H1.-ll _ _J ON1AN1 f rwrr XONX MtDO, Nl D/lun NOI M)w r)A110 3A• NN3d 1 N73nG •?? „3SLnb Nr01r)NL svno"l Nolan N73NIA '1 NrnowL11M I )At L7Yr3¦ • ? N In 0 if?Jl -JI--? 1-?ll=]1 -?1 01 11-=11 --1! :!! I II -.-II 5, ; I4 ll i. I. k II I? I II II ? _ /O,OewnN 11: :II - I 1 I I C•? ONIAMI -- - ID ?1 11 JI -l? i ¦0N. l? I II JI L u it II II II II II ? II 1 I ? )IJ3>?w?, II II - II c d -II - tl' - li ] .II II II II I 11 II II II )I 11 I. 1, ' II II .I II I II N n N N N n N N M N N N ! t t t t t Y -24- II _, _ 11 , Mr DOI 1 Mt Dr0l. ? II II ]i ..1]II( ?1?1 r)A110 BAT NM3d ! j?°.11)11 ,I N7)n0 1 I „)sfnr II 1 ' ll 11 I ' - 11 N.01N)NL 1 i )11MON1 I, II ?11 I 11.._. I Noldn • II II ?l IN)ONIA C ? NYMMS11M I ] 1 w' )M C.)t Y711 M A M M U k*I • ! E t E- N J W U Q a U Z Xa jzLL L? U O rsa a O z au 0 W a • • • APPENDIX B PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "A-2" ORIGINAL NET ADDRESS PID NUMBER TAX CAPACITY 7500 Bryant Ave. 33-028-24-41-0106 $ 1,882 7520 Bryant Ave. 33-028-24-41-0110 428 7528 Bryant Ave. 33-028-24-41-0112 441 6926 Chicago Ave. 26-028-24-33-0028 410 6612 2nd Ave. 27-028-24-42-0064 514 6844 14th Ave. 26-028-24-43-0056 498 7112 1st Ave. 28-028-24-12-0096 1,431 7245 12th Ave. 35-028-24-13-0001 522 7525 Girard Ave. 33-028-24-42-0094 565 6634 4th Ave. 27-028-24-41-0052 488 7021 Nicollet Ave. 34-028-24-12-0023 535 6310 15th Ave. 26-028-24-12-0077 1,277 6225 14th Ave. 26-028-24-34-0071 1,011 6825 Elliot Ave. 26-028-24-34-0085 606 6404 15th Ave. 26-028-24-13-0052 482 6525 15th Ave. 26-028-24-13-0110 595 7432 Aldrich Ave. 33-028-24-41-0026 497 6800 Portland Ave. 27-028-24-44-0001 610 7516 4th Ave. 34-028-24-41-0053 679 7025 Nicollet Ave. 34-028-24-12-0022 1,243 TOTAL $14,714 C -25- APPENDIX C ESTIMATE OF TAX INCREMENTS FOR TAX INCREMENT'FINANCING DISTRICT "A-2" A. VALUE OF NEW CONSTRUCTION Construction Cost (Land & Bldg) x Sales Ratio Estimated Market Value B. TAX INCREMENT VALUE Estimated Market Value x Tax Capacity Ratio (Class 1A; Prop. Type R-Hmstd) 1.00% $72,000 2.00% $43,000 2.50$ Balance New Tax Capacity - Original Net Tax Capacity (Avg.) Captured Net Tax Capacity x Tax Capacity Rate (1992) Annual Tax Increment x 20 Homes - Total Annual Tax Increment ....... RANGE ....... Per Home Per Home $ 85,000 $120,000 92.50$ 92.50% --------- --------- $ 78,625 $111,000 $ 78,625 $ 720 133 0 $ 853 (736) $ 117 120.944% $111,000 $ 720 780 0 $ 1,500 (736) $ 764 120.944% $ 142 $ 2,830 C. ESTIMATE OF AD VALOREM PROPERTY TAXES Estimated Market Value $ 78,625 x Tax Capacity Ratio (Class 1A; Prop. Type R-Hmstd) 1.00% $72,000 $ 720 2.00% $43,000 $ 133 2.50% Balance $ 0 New Tax Capacity $ 853 x Tax Capacity Rate 120.944% Annual Ad Valorem Taxes (per home) $ 1,032 x 20 Homes - Total Annual Ad $20,633 Valorem Taxes $ 924 $ 18,480 $111,000 $ 720 $ 780 $ 0 $ 1,500 120.944% $ 1,814 $ 36,283 • • • -26- APPENDIX D BUDGET* TAX INCREMENT FINANCING DISTRICT "A-2" Property Acquisition $ 1,031,400 Appraisals $ 6,500 Demolition/Site Clearance $ 100,000 Legal Expenses $ 5,000 TOTAL GROSS EXPENDITURE $ 1,142,900 This budget reflects the purchase by the HRA of all 20 Cycle II properties located within Tax Increment Financing District "A-2". 11 -27- APPENDIX E ESTIMATE OF IMPACTS ON OTHER TAXING JURISDICTIONS TAX INCREMENT FINANCING DISTRICT "A-2" The estimated impact on other taxing jurisdictions assumes construction would have occurred without the creation of Tax Increment Financing District "A-2". If the construction is a result of tax increment financing, the impact is $0 to other entities. Notwithstanding the fact that the fiscal impact on the other taxing jurisdictions is $0 due to the fact that the construction would not have occurred without the assistance of the City, the estimated impact of Tax Increment Financing District "A-2" would be as follows if the "but for" test (see Section Z. Municipal Findings, page 17 of the Plan) was not met: IMPACT ON TAX BASE ..............RANGE MINIMUM ............... ENTITY'S CAPTURED % OF CAPTURED TOTAL NET TAX TAX CAPACITY TO TAX CAPACITY CAPACITY ENTITY TOTAL ENTITY City of Richfield $ 23,097,324 $ 2,340 0.0101 Hennepin County 1,004,056,028 2,340 0.0002 School Distr. #280 21,745,830 2,340 0.0108 ..............RANGE MAXIMUM............... ENTITY'S CAPTURED % OF CAPTURED TOTAL NET TAX TAX CAPACITY TO TAX CAPACITY CAPACITY ENTITY TOTAL ENTITY City of Richfield $ 23,097,324 $ 15,280 Hennepin County 1,004,056,028 15,280 School Distr. #280 21,745,830 15,280 The estimates listed in the following table tax capacity when all construction is completed. and tax capacities are the payable 1992 figures jurisdictions. Tax Increment Financing District 0.0662 0.0015 0.0703 display captured The tax rates for all "A-2" is -28- anticipated to be certified under rates for payable 1993 or later as the acquisition of property progresses. The tax rate increase column is the estimate of the amount the tax rate of each jurisdiction would theoretically have to increase to raise the taxes listed in the potential taxes column. In addition, the impact on School District No. 280 does not included the effect of state aids for education upon school district funding. IMPACT ON-TAX RATES ..............MINIMUM IMPACT.............. CURRENT CAPTURED POTENTIAL TAX RATE TAX RATE TAX CAPACITY TAXES INCREASE ENTITY City of Richfield 0.22953 $ 2,340 $ 537 0.023 Hennepin County School Distr. #280 0.34327 0.57013 $ $ 2,340 2,340 $ $ 803 1,334 0.001 0.061 Miscellaneous 0.05996 $ 2,340 $ 140 0.000 ..............MAXIMUM IMPACT.............. CURRENT CAPTURED POTENTIAL TAX RATE TAX RATE TAX CAPACITY TAXES INCREASE ENTITY City of Richfield 0.22953 $ 15,280 $ 3,507 0.152 Hennepin County 0.34327 $ 15,280 $ 5,245 0.005 School Distr. #280 0.57013 $ 15,280 $ 8,712 0.401 Miscellaneous 0.05996 $ 15,280 S 916 0.001 E-A -29- • The Housing and Redevelopment Authority in and- for The City of Richfield, Minnesota Modification No. 1 To The Redevelopment Plan for Redevelopment Project Area "B" Modification No. 1 To The Tax Increment Financing Plan for Tax Increment Redevelopment District "B-1 " Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" All Related To The Richfield Rediscovered Housing Program Dated: July 20, 1992 PREPARED BY. The City of Richfield Department of Community Development Housing and Redevelopment Division 6700 Portland Avenue South Richfield, MN 55423 (612) 861-9760 • MAYOR MARTIN J. KIRSCH CITY COUNCIL William Bullock Ivan Ludeman Michael Sandahl Kristal Stokes • HOUSING AND REDEVELOPMENT AUTHORITY Thomas Harms, Chair Joan He/mberger Ivan Ludeman Vern Luettinger Larry Wozniczka CITY MANAGER/EXECUTIVE DIRECTOR James D. Prosser 0 • PLANNING COMMISSION William Snyder, Chair Nancy Edwardson Robert Elliott Timothy Erlander Michael Gallagher Danial Linnihan Morris Nilsen, ll Thomas Scaglia David Sumnicht CITY STAFF • Byron Wallace Director, Community Development John Dean HRA Attorney Ronald Batty HRA Attorney Bruce Palmborg Housing & Redevelopment Coordinator Bruce Nordquist Housing Supervisor Catherine Jones Housing Specialist Kathy Jablonsky Redevelopment Specialist 0 TABLE OF CONTENTS Part 1. Modification No. 1 Redevelopment Plan for - Redevelopment Project Area "B" Original Modification Plan No.1 Page No. Page No. Note To Reader --- (vi) A. Statement of Public Purpose 33 --- B. Statutory Authority 33 --- C. Description of Redevelopment Project Area. 34 --- D. Statement of Goals and Objectives 35 E. Development Activities and Agreements 36 1 F. Proposed Land Use 38 2 *G. Acquisition and Relocation Activities 38 2 H. Environmental Considerations 39 --- I. Redevelopment Plan Modification. 39 J. Administration of Redevelopment Project 39 --- (i) TABLE OF CONTENTS Part 11. Modification No. 1 Tax Increment Financing Plan for Tax Increment Redevelopment District "B-1 " Original Modification Plan No.1 Page No. Page No. A. Statutory Authority . B. Statement of Objectives C. Development Program . D. Description of Property in the Tax Increment Financing District E. Classification of the Tax Increment Financing District F. Parcels In Acquisition G. Estimate of Costs H. Estimated Amount of Obligated Funds. I. Sources of Revenue J. Original Tax Capacity K. Estimated Captured Tax Capacity L. Duration of the District . M. Estimated Impact on Other Taxing Jurisdictions. N. Modifications of the Tax Increment Financing District 0. Limitation on Administrative Expenses P. Limitation on Duration of Tax Increment Financing Districts . 41 --- 41 --- 41 --- 42 5 42 --- 44 5 44 --- 44 --- 44 --- 45 --- 45 --- 45 --- 45 --- 46 --- 46 --- 46 --- • • is (ii) • Original Modification Plan No.1 Page No. Page No. Q. Limitation on Qualification of Property in Increment District not Subject to Improvement. 46 --- R. Limitation of the Use of Tax Increment 47 --- S. Notification of Prior Planned Improvements 47 --- T. Excess Tax Increments 48 --- U. Restrictions on Pooling; Five-Year Limit. 48 --- V. Assessment Agreements 50 --- W. Administration of the Tax Increment Financing District and Maintenance of the Tax Increment Account 50 --- X. Annual Disclosure Requirements. 51 --- Y. Assumptions 51 --- Z. Municipal Findings 51 --- *Appendix A: Ma : Redevelo ment Pro t Ar A 57 --- p p jec ea Appendix B: Property in the Tax Increment Redevelopment District "B-1" 59 6 Appendix C. Estimate of Tax Increments. 60 --- Appendix D: Tax Increment Financing Budget. 61 --- Appendix E. Estimate of Impacts on Other Taxing Jurisdictions 62 --- • (iii) Table of Contents Part Ill. Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" Page No. A. Statutory Authority 7 B. Statement of Objectives 7 C. Development Program 7 D. Description of Property in the Tax Increment Financing District 9 E. Classification of the Tax Increment Financing District 9 F. Parcels In Acquisition 10 G. Estimate of Costs 10 H. Estimated Amount of Obligated Funds. 10 I. 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 (iv) T. U. V. W. X. Y. Z. Notification of Prior Planned Improvements Excess Tax Increments Restrictions on Pooling; Five-Year Limit. Assessment Agreements Administration of the Tax Increment Financing District and Maintenance of the Tax Increment Account . Annual Disclosure Requirements. Assumptions Municipal Findings APPENDICES. Appendix A: Appendix B: Appendix C. Appendix D: Appendix E. Map: Redevelopment Project Area "A" and "B" and Tax Increment Financing Districts "A-2" and "B-2". Property in the Tax Increment Redevelopment District "B-2" Estimate of Tax Increments. Tax Increment Financing Budget. Estimate of Impacts on Other Taxing Jurisdictions Page No. 14 14 15 16 17 17 18 18 21 23 25 26 27 28 (v) NOTE TO READER The following text represents modification to the Richfield Rediscovered Housing Program, formerly known as the Expanded New Home - Scattered Site Housing Program. Changes to the Redevelopment Plan for Redevelopment Project Area "B" and Tax Increment Financing Plan for Tax Increment Financing District "B-1" are identified under the section titled Modification No. 1 to the Redevelopment Plan for Redevelopment Project Area "B" (Redevelopment Plan) and Modification No. 1 to the Tax Increment Financing Plan for Tax Increment Redevelopment District "B-1" (Tax Increment Plan). Only those areas of the Redevelopment Plan and Tax Increment Plan requiring revision are incorporated in this first modification. The Tax Increment Financing Plan for Tax Increment District "B-2" (Tax Increment Plan) represents a new plan, not a modification. The modified Redevelopment Plan and the new Tax Increment Plan both represent a continuation of the goals and objectives set forth in the original Redevelopment Plan and Tax Increment Plan. Generally, the substantive changes to the housing program under the modification and new Tax Increment Plan include broadening the opportunity for program participantion and identifying additional acquisition property. To understand all of the program modifications and proposed activities, a review of the original Redevelopment Plan, Tax Increment Plans, and other related documents, dated July 16, 1990, is recommended. • (vi) Part L Modification No. 1 Redevelopment Plan for Redevelopment Project Area "B" E. Development Activities and Agreements The objectives of this redevelopment plan will be accomplished pursuant to the authority granted to the HRA by the Housing and Redevelopment Authorities Act, Minn. Stat., Sec. 469.001, et seq. The following activities are appropriate for the area. Description of Anticipated Public Development Activities The anticipated public development activities in the redevelopment project area to be undertaken by the HRA and City in order to support the private development activities include: 1. Property acquisition; 2. On-site clearance; is 3. On-site improvements; 4. New construction 5. Remedial site environmental activities; and 6. Adjacent public improvements and utilities which service site. Description of Anticipated Private Development Activities The private development activities within the project area which are anticipated to occur include: 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. -1- Any and all proposals for development and redevelopment will be reviewed by the HRA and City, when appropriate, to determine conformance with the redevelopment plan and applicable municipal ordinances and codes. Property acquired by the HRA will be subject to a contract for sale to an interested developer, builder, or buyer.. The general requirements to be imposed.upon an interested developer, builder, or buyer by the contract for sale are: 1. To redevelop the property purchased in accordance with this redevelopment plan; 2. To commence and complete the construction of improvements on the property within specified periods of time; 3. Not to resell the property before improvements are made without the prior consent of the HRA; and 4. Not to discriminate on the basis of age, race, color, sex, creed, or national origin on the sale, lease, transfer, or occupancy of the property purchased from the HRA. F. Proposed Land Use The current land uses in the redevelopment project area include the following: - Single family residential; - Apartment; - Duplex; - Commercial; - Parks; - Vacant; Quasi-public (e.g. churches, cemetery, nursing homes, private schools, and service organizations); and - Water. New uses will be restricted to single family residential. G. Acquisition and Relocation Activities 1. Acquisition As a means of comprehensively formulating Cycle II of the Richfield Rediscovered Housing Program, HRA staff recently undertook the following tasks to identify property for acquisition: a. Survey residential property owners that have expressed interest'in the voluntary sale of their property in Cycle II of the Richfield Rediscovered Housing Program. • • • -2- b. Evaluate properties for program eligibility. The following property is iden tified for acquisition for Cycle II of the program: ADDRESS PID NUMBER 6641 Oliver Ave. 28-028-24-32-0045 6924 Newton Ave. 28-028-24-33-0073 6539 Oliver Ave. 28-028-24-23-0092 7124 Washburn Ave. 32-028-24-12-0073 6608 Stevens Ave. 27-028-24-42-0073 6645 Upton Ave. 29-028-24-42-0015 1908 West 66th St. 28-028-24-23-0125 2916 West 71.1/2 St. 32-028-24-12-0072 6300 Aldrich Ave. 28-028-24-11-0041 6912 Oliver Ave. 28-028-24-33-0053 7015 Penn Ave. 33-028-24-22-0003 7021 Penn Ave. 33-028-24-22-0004 For Cycle II program purposes, the following Cycle I property is being removed from the acquisition list. This property may be considered for acquisition at some fut ure date. ADDRESS PID NUMBER 6300 Aldrich Ave.* 28-028-24-11-0041 *Subject property at 6300 Aldrich Avenue is being moved to the Cycle II acquisition list. -3- (Intentionally Left Blank) • -4- Part A Modification No. 1 Tax Increment Financing Plan for Tax Increment Redevelopment District "B-1 " D. Description of Property in the Tax Increment Financing District The property listed within Appendix B has been identified for removal from TIF District "B-1". This property is being moved to TIF District "B-2". Also see Appendix B for additional descriptive program information. F. Parcels in Acquisition The following property has been identified for removal from the acquisition list. This property is hereby moved to the Cycle II acquisition list. See Appendix B for additional descriptive program information. PIN NUMBER ADDRESS 28-028-24-11-0041 6300 Aldrich Ave. So. • -5- APPENDIX B PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "B-1" The following property, known as Cycle I property within the Tax Increment Finaning Plan for Tax Increment Financing District "B- 2", is removed from Tax Increment Financing District "B-1". The removal of this property is a program objective under Cycle II of the Richfield Rediscovered Housing Program, known as the Expanded New Home - Scattered Site Housing Program under the original Plan. The property will be part of TIF District "B-2" and the related acquisition list. ORIGINAL NET PIN NUMBER ADDRESS TAX CAPACITY* 28-028-24-11-0041 6300 Aldrich Ave. So. $ 518 • *Original Net Tax Capacity for taxes payable in 1990. • -6- 0 Part ll. Tax Increment Financing Plan for Tax Increment Redevelopment District "B-2" A. Statutory Authority The statutory authority for the undertaking of a tax increment financing district (TIF District "B-2") and related Tax Increment Financing Plan (Tax Increment Plan) in Redevelopment Project Area "A" (Project Area "A") for the Richfield Rediscovered Housing Program formerly known as the Expanded New Home - Scattered Site 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 seek to achieve the goals and objectives set forth in Part I of the Redevelopment Plan for Redevelopment Project Area "B", dated July 16, 1990. In addition to these goals and objectives, program objectives set forth in HRA Letter No. 13, dated April 20, 1992, are as follows: - Create a voluntary market for the purchase and removal of substandard, poor quality housing. - Provide sites for new homes by working closely with a qualified builder/buyer team. - Provide a continuing program presence which maintains the interest and market momentum already achieved. - Provide a financial structure which generates a sufficient cash flow to pay off principal and provide interest payments if funds are available. C. Development Program 1. Description of Development Activities . On January 16, 1990, the HRA adopted a motion directing staff to proceed with the formulation of the Expanded New Home Program. On April 20, 1992, the HRA passed a motion to authorize continuation of this program, currently named the Richfield Rediscovered Housing Program. -7- A survey of purchasers of new homes involved in the original housing program (Cycle I) provided information on the success of the program. The following observations were made with respect to Cycle I of the program and addressed in HRA Letter No. 13: a. The program has met the needs of various buyers which include young families, empty nesters, singles, move- up buyers, and first-time home buyers. b. The permanent bedroom count added to the housing supply in the city is 25. c. Relatively few school-aged children are involved with the newly acquired housing units. Therefore, confidence exists that the increase in dwelling unit size will result in a new increase in school-aged children when all the new units are occupied. d. During the first quarter of 1992, approximately 60 sellers and 15 buyers have indicated interest in participating in a continued program. Sellers, builders, and buyers continue to contact HRA staff to indicate program interest and participation. As with Cycle I of the program and so with Cycle II, a comprehensive, integrated approach for acquisition, site clearance, and new construction was formulated and 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 Currently, there are no development contracts. 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; E • -8- 4. New construction; 5. Remedial site environmental activities; and 6. Adjacent public improvements and utilities which service site. For Cycle II of the Housing Program, a total of 32 properties have been identified for program participation and acquisition. Twenty (20) of the properties are located within Redevelopment Project Area "A" while the remaining twelve (12) are within Redevelopment Project Area "B". (Refer to Appendix A for map of Redevelopment Project Areas.) Redevelopment Project Area B contains one property with a double lot. A property subdivision will be required in order to construct two homes on site. Initial construction for Cycle II is anticipated to begin in the last quarter of 1992. Construction for each home is anticipated to be approximately 120 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-2" 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 "B-2" to be established within Project Area "B" 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. A detailed account of property examination for eligibility are enumerated within a document entitled "Richfield Rediscovered Housing Program: Blight Qualification Survey - Cycle II" 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. • -9- F. Parcels in Acquisition 0 The following property has been identified for acquisition in Cycle II of the Housing Program: ADDRESS PID NUMBER 6641 Oliver Ave. 28-028-24-32-0045 6924 Newton Ave. 28-028-24-33-0073 6539 Oliver Ave. 28-028-24-23-0092 7124 Washburn Ave. 32-028-24=12-0073 6608 Stevens Ave. 27-028-24-42-0073 6645 Upton Ave. 29-028-24-42-0015 1908 West 66th St. 28-028-24-23-0125 2916 West 71 1/2 St. 32-028-24-12-0072 6300 Aldrich Ave. 28-028-24-11-0041 6912 Oliver Ave. 28-028-24-33-0053 7015 Penn Ave. 33-028-24-22-0003 7021 Penn Ave. 33-028-24-22-0004 For Cycle II Program purposes, the following Cycle I property is removed from the acquisition list. This property is hereby moved to the Cycle II acquisition list. ADDRESS PID NUMBER 6300 Aldrich Ave. 28-028-24-11-0041 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 $500,000 is available under Cycle II to continue the housing program. Repayment of these funds will be through the use of. tax increment financing -10- and other sources of revenue, if any, available to the HRA and City. 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 tax increment. In addition to the tax increment 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-2" is based on the January 2, 1992 assessed value placed on the property by the county assessor. The OTC for the district is $9,890. (See Appendix B, Property Located in Tax Increment Financing District "B-2".) 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 increased 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. • -11- K. Estimated Captured Tax Capacity Pursuant to Minn. Stat., Sec. 469.175, subd. 1 and Minn. Stat., Sec. 469.177, subd. 2, the estimated captured net tax capacity (CTC) of the tax increment district is within a range of $121 to $887 per home. The total. CTC for 12 new homes within the project area ranges from $1,452 to $10,644. 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). 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 -12- 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 by 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 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 that parcel shall be excluded from 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 on 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. -13- 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 preceding 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 amount necessary to cancel any tax levy as provided in Minn. Stat., Sec. 475.61, 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 -14- 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 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 -15- 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. 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 land and completed improvements for the duration of the tax increment district. The assessment agreement shall be presented to the county assessor -16- 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: 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; 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 -17- 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 HRA, 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 II" 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 HRA, would not reasonably be -18- 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 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 formerly known as the Expanded New Home - Scattered Site 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. -19 (Intentionally Left Blank) 9 • • -20- • APPENDICES Richfield Rediscovered Housing Program Redevelopment Project Area "B" and Tax Increment Financing District "B-2" • -21- (Intentionally Left Blank) • • -22- 0 APPENDIX A MAP REDEVELOPMENT PROJECT AREA"A" AND "B" • -23- F F F F T e = Plitt II 1 I ?-11 ??:t _ _ 1ED I UI - ?EII:_, 1 Plot 4161 410113 ONOI )AS evo30 I' (r-? ' Ir ?;I 11 I! II Yla1?' I Y1/1 f l x191 II II II1 NOIONIn DO,Q I I I 11 11 Y, ?, . I I .-If' ?lr' 11 II Y,,, - -- -?11 il 11 11 l I YI DI III 1011,3 '1i = ,? O „ OOY 01N0 I' ? • I J `nrnnl0:i . rrVd II I ? - 1 ONVINTO '? 1 I :Iql I 1 , . . 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I 11 I DDI Ny WT DOOR ? II II II' _ II I, 1 J II 1 I4 j 1 I II I . I 11 1I I )I ..1 -- N0103N + 6IA1,O K °:11 BAT NN3d 1 ) -JI 0 0 i ? `IAIIII I -- I , 1 N))n0 1 ?I .. ,I I! _.,, ? ? ! II I II . II __ ?I? „BTTnY 1\? /?l NIOIY )NT _. - 1,..I lal?. 1 li _.?!.'' II --II --•? I II _ i _ 1? 1 itwoNl NOldn II S . , N .II II II III II I II ,IIII II I __ 11..__ I NOldn 1N)ONIA II I1 1 II II Ii Ii II I II ?I II '? -/I II I ;4'k i lM)OM1A Nrns NsvM I?i II II I ?) II li Ii II I II 11. '? NYnews" )AV 63x 03x xll II Ii F Ii Ii ?I { I I? 1? 1 I I .._11 V )AY 63>tY31c F F F F r .wn F N F F N F F F F C. F G R: • C O _ M • A b w l? T O w r N A • j ? r t ?j u to o to to rr e e ? R F .: w w w X X w R -24- . N -j w (U Na Wo ¢z i z x 49 w U V 0 Z¢ z 0 Z J n w o W l%w It 44 El • 0 • APPENDIX B PROPERTY LOCATED IN TAX INCREMENT FINANCING DISTRICT "B-2" ? is 0 ADDRESS 6641 Oliver Ave. 6924 Newton Ave. 6539 Oliver Ave. 7124 Washburn Ave. 6608 Stevens Ave. 6645 Upton Ave. 1908 West 66th St. 2916 West 71 1/2 St. 6300 Aldrich Ave. 6912 Oliver Ave. 7015 Penn Ave. 7021 Penn Ave. PID NUMBER 28-028-24-32-0045 28-028-24-33-0073 28-028-24-23-0092 32-028-24-12-0073 27-028-24-42-0073 29-028-24-42-0015 28-028-24-23-0125 32-028-24-12-0072 28-028-24-11-0041 28-028-24-33-0053 33-028-24-22-0003 33-028-24-22-0004 TOTAL ORIGINAL NET TAX CAPACITY $ 1,254 676 1,092 530 360 1,462 450 595 546 655 1,135 1,135 $ 9,890 -25- APPENDIX C ESTIMATE OF TAX INCREMENTS FOR TAX INCREMENT'FINANCING DISTRICT "B-2" ....... RANGE ....... A. VALUE OF NEW CONSTRUCTION Per Home Per Home Construction Cost (Land & Bldg) $ 90,000 $130,000 x Sales Ratio 92.50% 92.50% --------- --------- Estimated Market Value $ 83,250 $120,250 B. TAX INCREMENT VALUE Estimated Market Value $ 83,250 $120,250 x Tax Capacity Ratio (Class 1A; Prop. Type R-Hmstd) 1.00% $72,000 $ 720 $ 720 2.00% $43,000 225 860 2.50% Balance 0 131 New Tax Capacity $ 945 $ 1,711 - Original Net Tax Capacity (Avg.) -- ---(824) -- --(824) Captured Net Tax Capacity $ 121 $ 887 x Tax Capacity Rate (1992) 120.944% 120.944% Annual Tax Increment -- $ ------- 146 -- $ ------- 1,073 x 12 Homes - Total Annual Tax $ 1,756 $ 12,877 Increment C. ESTIMATE OF AD VALOREM PROPERTY TAXES Estimated Market Value $ 83,250 $ 120,250 x Tax Capacity Ratio (Class 1A; Prop. Type R-Hmstd) 1.00% $72,000 $ 720 $ 720 2.00$ $43,000 $ 225 $ 965 2.50% Balance $ 0 $ 0 New Tax Capacity -- $ ------- 945 -- $ ------- 1,685 x Tax Capacity Rate 120.944% 120.944% Annual Ad Valorem Taxes (per home) -- $ 1,143 ------- -- $ ------- 2,038. x 12 Homes - Total Annual Ad $ 14,858 $ 26,494 Valorem Taxes -26- APPENDIX D BUDGET* TAX INCREMENT FINANCING DISTRICT "B-2" Property Acquisition $ 565,000 Appraisals $ 3,900 Demolition/Site Clearance $ 60,000 Legal Expenses $ 5,000 TOTAL GROSS EXPENDITURE $ 633,900 ? 0 0 *This budget reflects the purchase by the HRA of all 12 Cycle II properties located within Tax Increment Financing District "B-2". -27- APPENDIX E ESTIMATE OF IMPACTS ON OTHER TAXING JURISDICTIONS TAX INCREMENT FINANCING DISTRICT "B-2" The estimated impact on other taxing jurisdictions assumes construction would have occurred without the creation of Tax Increment Financing District "B-2". If the construction is a result of tax increment financing, the impact is $0 to other entities. Notwithstanding the fact that the fiscal impact on the other taxing jurisdictions is $0 due to the fact that the construction would not have occurred without the assistance of the City, the estimated impact of Tax Increment Financing District "B-2" would be as follows if the "but for" test (see Section Z. Municipal Findings, page 15 of the Plan) was not met: IMPACT ON TAX BASE ..............RANGE MINIMUM ............... ENTITY'S CAPTURED $ OF CAPTURED TOTAL NET TAX TAX CAPACITY TO TAX CAPACITY CAPACITY ENTITY TOTAL ENTITY City of Richfield $ 23,097,324 $ 1,452 0.0063 Hennepin County 1,004,056,028 1,452 0.0001 School Distr. #280 21,745,830 1,452 0.0067 ........ ....RANGE MAXIMUM ............... ENTITY'S CAPTURED % OF CAPTURED TOTAL NET TAX TAX CAPACITY TO TAX CAPACITY CAPACITY ENTITY TOTAL ENTITY City of Richfield $ 23,097,324 $ 10,644 Hennepin County 1,004,056,028 10,644 School Distr. #280 21,745,830 10,644 The estimates listed in the following table tax capacity when all construction is completed. and tax capacities are the payable 1992 figures jurisdictions. Tax Increment Financing District 0.0461 0.0011. 0.0489 display captured The tax rates for all "B-2" is -28- anticipated to be certified under rates for payable 1993 or later as the acquisition of property progresses. The tax rate increase column is the estimate of the amount the tax rate of each jurisdiction would theoretically have to increse to raise the taxes listed in the potential taxes column. In addition, the impact on School District No. 280 does not included the effect of state aids for education upon school district funding. IMPACT ON TAX RATES ..............MINIMUM IMPACT.............. CURRENT CAPTURED POTENTIAL TAX RATE TAX RATE TAX CAPACITY TAXES INCREASE ENTITY City of Richfield 0.22953 $ 1,452 $ 333 0.014 Hennepin County 0.34327 $ 1,452 $ 498 0.000 School Distr. ##280 0.57013 $ 1,452 $ 828 0.038 Miscellaneous 0.05996 $ 1,452 $ 87 0.000 ..............MAXIMUM IMPACT.............. CURRENT CAPTURED POTENTIAL TAX RATE TAX RATE TAX CAPACITY TAXES INCREASE ENTITY City of Richfield 0.22953 $ 10,644 $ 2,443 0.106 Hennepin County 0.34327 $ 10,644 $ 3,654 0.004 School Distr. #280 0.57013 $ 10,644 $ 6,068 0.279 Miscellaneous 0.05996 $ 10,644 $ 638. 0.000 • -29- HOUSING AND REDEVELOPMENT AUTHORITY • HRA Letter No. 19 Agenda July 20, 1992 Issue Statement: Public hearing and authorization of the sale of a Richfield Rediscovered property at 6407 15th Avenue to Marlin Grant Homes, Inc. Background: Marlin Grant Homes, Inc. of Bloomington, MN., has secured a purchase agreement from a buyer for the lot at 6407 15th Avenue. The sale price of the lot will be $22,500. The new house will be valued at $113,800. (Preliminary plan sheets are attached.) A development agreement very similar to those used previously requires Marlin Grant Homes, Inc. to: ? pay the stated lot value upon completion of the home; ? provide financial security during the construction period with a Letter of Credit, or similar security, that has a value of $37,876. (This amount is the difference between the lot price of $22,500 and the total HRA investment in the property.) • ? complete the home and pay for the lot by December 31, 1992; and ? meet design and insurance requirements which are specified. Marlin Grant, previously President of Marv Anderson Homes, has already completed one Richfield Rediscovered home at 6321 Humboldt Avenue with his new construction company. The project was promptly developed and all of the HRA's financial requirements were met. Similar success is anticipated at 6407 15th Avenue. The HRA may recall that earlier in 1992, Wakely Construction was going to purchase the site. Wakely did not provide the Letter of Credit performance security at closing as required and the sale was cancelled. Two lots remain unsold; 6415 15th, although Marlin Grant is working with a perspective buyer; and, 6538 Bloomington. Recommended Motion: Following the public hearing, adopt the attached resolution which authorizes the Chair and Executive Director to execute agreements which sell 6407 15th Avenue to Marlin Grant Homes, Inc. for development of a new single family home. Basis of Recommendation: 1. A check of references indicates Marlin Grant Homes, Inc. • is an experienced, capable, financially secure builder. 2. The HRA has the lot at 6407 15th Avenue available to sell. • 3. A development agreement has been negotiated and is in conformance with program guidelines. 4. Notice of public hearing was published in the Sun-Current on July 8, 1992. 5. Previously, the Planning Commission found the sale of the lot for development of a new home to be in conformance with the City's comprehensive plan. Alternative Recommendation: Do not proceed with a development agreement with Marlin Grant Homes, Inc. and direct staff to find another buyer. Discussion/Decision Mode: Marlin Grant Homes hopes to close by the end of July 1992 and start construction immediately thereafter. James D- Prosser Execut?li/ve Director is JDP:ds Respectfully submitted, RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6407 15TH AVENUE TO MARLIN GRANT HOMES, INC., IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT WHEREAS, the Housing and Redevelopment Authority in and.for the City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the Expanded New Home Program Redevelopment Project (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real property being described as follows: Lot 19, Block 6 "Girard Parkview" and located at 6407 15th Avenue; and WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, a developer, Marlin Grant Homes, Inc. of Bloomington has been identified as the purchaser of the described property, in accordance with a development agreement; and WHEREAS, the public hearing has been held after proper public notice; and • WHEREAS, the Planning Commission has made a finding that the disposition of the property for residential purposes is consistent with the comprehensive plan. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and 6407 15th Avenue is authorized to be sold to Marlin Grant Homes, Inc. for $22,500 in accordance with a development agreement with the HRA. 2. That the Chairperson and Executive Director are authorized to execute the Development Agreement and other agreements as required to effectuate the sale to Marlin Grant Homes, Inc. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of July, 1992. ATTEST: • Thomas E. Harms, Chairperson Joan Helmberger, Secretary C I.--b 0 70 70 Z W a ? J Z a W a = Z F... T" w o o. co d??? I M ? ? ? ??? 0 '..TI: U i l I El rLI E - r U-7 F I!Il' ! Ii'I I •Illl it .li 0 ? ? 7EI I ii I' , III ilia, - ?;,!.; III; II' II j i 0 ©l1I1 L1 I!,; i iII I; i ?01?. ? I ?'I illlill Illl I I !I !i, _ ???ii• I,?!? , II I!Illll II ?', !I,?.i,l j,I ,III! ICI ?I ( II III it ? ? '? n13 n 0 it ;!,;i I,. f u.i;ll i lll, II,! I i j`j.!I: j I ?• , ? ail, 0 1 _ W D z W Q H Ln r ti 0 et z a J a oc a z - W a 0 .b d 44 C1' N 1a O C: O O nt b ti-I r-I Q 41 a 3 7 cd «! v 'r1 O 41 ? 444 M 41 d ?4 ri -q 3a b G 0 Qi O ?ti =o1 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 18 Agenda July 20, 1992 Issue Statement: Consideration of modification in compensation to the HRA Commissioners for meeting attendance. Background : MN Statutes 469.011 Subdivision 4 provided for Commissioners to be paid $35 for attending each regular and special meeting. The aggregate of all expenses including travel and meetings was capped at $2,500 per year per Commissioner. In the 1992 legislative session, the Statute was amended effective August 1, 1992. The amendments include the following: 1. Eliminating the payment of $35 per meeting and substituting "up to $55" per meeting. 2. The expenditure cap of $2,500 annually per Commissioner was deleted. 3. "Commissioners who are elected officials or full time state is employees or full time employees of the political subdivisions of the state may not receive the daily payment, but they may suffer no loss in compensation or benefits from the state or a political subdivision as a result of their service on the board. Commissioners who are full time state employees or full time employees of the political subdivisions of the state may receive the expenses provided for in this subdivision unless the expenses are reimbursed by another source". Recommended Motion: 1. Determine the amount of payment Commissioners will be eligible to receive up to $55 per meeting. 2. Establish the eligibility of Commissioners to receive the payment. Basis of Recommendation: 1. The amendment makes it possible to change the amount paid per meeting. 2. Mandatory eligibility criteria have been incorporated into the law. Alternative Recommendation: Take no action. If none were taken, the meeting rate would • remain constant. The eligibility criteria will become effective automatically. Discussion/Decision Mode: The law will become effective August 1, 1992. Respect ly submitted, Jam siD. Prosser ExZu? /Ive Director JDP:ds 6744 Wentworth Ave S • Richfield, MN 55423 July 7, 1992 Mr. James Prosser Executive Director of HRA City of Richfield 6700 Portland Ave S' Richfield MN 55423 Dear Jim, This letter requests items for the BRA Commission Meeting, as follow up to my letter of June 11, 1992. Please forward a copy of this letter to Chairman Tom Harms. 1. HIGHWAY AND AIRPORT PROPERTY LOSSES At a'recent meeting, Chairman Tom Harms raised concern about the cumulative impact on, Richfield of the properties lost to: a. New Ford Town and Rich Acres sell out b. Interstate 35W and 494 reconstruction c. 77th Street improvements. is A tabulation of properties acquisitions within Richfield for each of these projects and resulting impact on property tax revenues for the City, County and School District is needed. Review of this information, along with strategies for recovery and consideration of other mitigating actions is requested for the July meeting of BRA Commissioners. 2. HUB WEST PROJECT A summary of the Hub West redevelopment is requested now that the project is in operation. Such summary shall include: a. Fiscal Summary - Final cumulative costs to the City and Tax Increment district and estimated cost to complete open items. b. Physical Review - Conformance to the original agreement including, but not limited to, floor area, parking spaces, landscaping, signs, valuation, traffic flow, pedestrian and handicapped accessibility. C. Related Needs - A list City improvements adjoining this development which should be considered to insure public safety, • aesthetics and success of this project and the LHN district. 1 Examples are: pedestrian crossing of 66th Street, landscaping of the area at the railroad tracks on 66th Street and linking of this project to neighboring businesses. 3. AIRPORT BUDGET The 1992 BRA Budget included $50,000 for Airport activities. Extensive Airport related work has been carried out by the City without review by the BRA Commission. A summary of BRA accomplishments along with the costs incurred to date by the BRA is requested for review at the July meeting of BRA Commissioners. 4. VO-TECH PROJECT The lack of activity on the house at 6801 Nicollet is raising the following concerns in the neighborhood: a. The time to complete is excessive and the extended schedule for completion by December does not seew realistic given the pace of this and other Vo-Tech projects. b. Construction site is unsightly and has created a blight on neighborhood. C. No effort is made to remove the Satellite Out House or • construction material during extended periods of inactivity. d. Weathering of the unprotected underlayment materials during the long period of construction is very possibly causing degradation to the structure. e. During periods of activity, the large number of students involved have created parking disturbances. As one opposing extension of the Vo-Tech schedules at. the May meeting, I request that this item be brought up for reconsideration. As a minimum, a way must be found to finish the exterior of the house at 6801 Nicollet before the end of summer. As a courtesy, I request that a letter, indicating the time and date that 6801 Nicollet completion schedule will be discussed and inviting attendance, be sent to adjacent neighbors and: Mr. Tom Egan, 100 East 69th Street Mr. and,Mrs. Joe Popko, 6745 Nicollet Avenue S Mr. Floyd Sandell, 6737 Third Avenue S. • 5. REVIEW OF STAFF COMMITMENTS 2 The cancellation of the June meeting under the pretext of no significant issues does not seem to be a valid reason in view the items discussed in this letter. It seems rather that limitations on staff time may have been the real reason, especially since considerable staff efforts are being directed toward 77th Street and other projects which not controlled by HRA. Review of staff assignments, along with funding sources, is requested as an item of discussion at the next meeting of HRA Commissioners. 6. HRA 1993 BUDGET GUIDELINES of the It seems that budgeting for the 1993 fiscal year, now well underway by Staff, would benefit from discussion on policy and needs from the BRA Commissioners. Related to this would be the presentation of the 1991 Comprehensive Annual Report as well as the Auditor's report and an opportunity for review by the ERA Commissioners. A presention of the guidelines being used to prepare the 1993 Budget and discussion of the process by which Commissioners can provide input is requested. • Very truly yours, L. R. 'Woz czka • 3 L(; IVED JUL 1 4 0992 HAROLD J. SOD E IIBERG WINSTON W. BORDEN ROLLIN F.WEST THOMAS E. HARMS JAMES A. STEIN DARRELL B. JOHNSON LLOYD S. STERN MARK R. MILLER WILLIAM J. JOAN IS WILLIAM S.BORCHERS THOMAS E. SCHMIDT JEROME M.SODERBERG LEE A. HENDERSON SUSAN RESTER MILES STEVEN T. HETLAN0 LAW OFFICES HESSIAN, MCKAsy & SODERBERG PROFESSIONAL ASSOCIATION 4700 IDS CENTER MINNEAPOLIS, MINNESOTA 55402 (612) 330-3000 - TELECOPIER, (612) 371-0653 July 13, 1992 MAURICE A. HESSIAN, SR. 11888-19561 MAURICE A.HESSIAN,JR.(1 9 20-19 71) JOHN J. M4KASY 11906-19861 SAINT PAUL OFFICE 700 SAINT PAUL BUILDING SIX WEST FIFTH STREET SAINT PAUL,MINNESOTA 55102 (612) 224-4911 WASHINGTON, D. C. OFFICE SUITE 500, 1225 EYE STREET, N. W. WASHINGTON, D. C.20005 (2021 842-3000 330-3005 WRITER'S DIRECT LINE Mr. James Prosser HRA Executive Director City of Richfield 6700 Portland Ave. S. Richfield, MN 55423 Re: July 20, 1992 HRA Meeting Dear Jim: Thank you for Wozniczka dated July • staff be prepared to As you know, my view the members free acc issues they feel mer in that vein. sending me a copy of the letter from Larry 7, 1992 in which he requested that the HRA address a number of areas at our next meeting. as Chairperson of the HRA is to allow all of ess to the staff and the ability to raise any it consideration. I view Larry's letter to be I am, however, aware that the HRA has limited resources available and thus I am not inclined to allow any individual member to request information which imposes an extensive cost or time burden on the staff without discussion of the allocation of resources to such projects by the entire Board. In reviewing the letter, I am concerned, for example, that preparing an impact study of the purchase of New Ford Town and Rich Acres from the perspective of the City, Hennepin County and the School District, together with a discussion of strategies for recoveries and an outline of mitigating factors, is a massive task. I am also not sure that such a task would result in information directly pertinent to actions within the jurisdiction of the HRA. For the next meeting, I would request that you and the staff be prepared to discuss what information is currently available on these various issues raised and the size of the work load required to address the various projects raised by Larry's letter. This will be a matter to be discussed by the full HRA before additional • resources are committed. Mr. James Prosser July 13, 1992 Page 2 If you have any questions related to these matters, please give me a call. y truly you s, Thomas E. Harms TEH:jg cc: commissioner Larry Wozniczka 22282-1 • 16