07-16-90 agendas
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 17
Agenda July 16, 1990
Issue Statement:
Adoption of resolution approving the issuance of a Certificate of
Completion, professional office building, Dr. Donald A. Johnson,
6945 Penn Avenue South (Seventieth Street-and Penn Redevelopment
Project).
Background:
A Contract For Private Development provided for the construction
of a professional office building to be used primarily as a
dental facility at 70th Street and Penn Avenue South. The
contract is dated September 6, 1988. Article IV, Section 4.4
provides for the issuance by the HRA of a Certificate of
Completion. The appropriate City personnel have determined that
the project has been completed according to approved plans.
Recommended Motion:
Adopt the attached resolution approving the issuance of a
Certificate of Completion.
Basis of Recommendation:
1. The redevelopment is complete according to approved plans.
2. 'The developer, in accordance with the Contract, has requested
the issuance of the certificate.
3. The Contract calls for the HRA to not unreasonably withhold
approval of the certificate.
Alternative Recommendation:
Do not adopt the resolution.
Discussion/Decision Mode:
The developer requested the
18. The Contract provides
SLD:ds
issuance of the certificate on June
the HRA 45 days to respond.
Re c fully submi ed,
-'
teven L. ev c
Acting Executive Director
RESOLUTION NO.
THE .HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
AUTHORIZING EXECUTION OF A CERTIFICATE OF
COMPLETION FOR 6945 PENN AVENUE SOUTH
WHEREAS, the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota (HRA) entered into an agreement
with Donald A. Johnson (Developer), dated September 6, 1988
(.Agreement), pursuant to and in furtherance of the Seventieth
Street and Penn Avenue Redevelopment Project (Project) heretofore
adopted by the City and the HRA; and
WHEREAS, the. Agreement .obligated the Developer to construct
certain improvements to property identified in that Agreement;
WHEREAS, Article IV, Section 4.4 of the Agreement required
the HRA to inspect the project and furnish the Developer with a
Certificate of Completion upon completion of the construction;
and
WHEREAS, the Agreement establishes the form for the
Certificate of Completion in Exhibit E; and
WHEREAS, City personnel have inspected the improvements and
found them to be in accordance with the terms of the Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority in and for the City of Richfield,
Minnesota,
That the.Chairman and Executive Director are directed to
execute the Certificate of Completion and deliver the same to the
Developer.
Passed by the Housing and Redevelopment Authority of
Richfield, this 16th day of July, 1990.
Thomas E. Harms, Chairperson
ATTEST:
Joan Helmberger, Secretary
CERTIFICATE OF COMPLETION
EXHIBIT E
The undersigned hereby .certifies that Donald A. Johnson, an
individual, residing in Hennepin County, has fully and completely
complied with the obligations under Article IV of that document
entitled "Contract for Private Redevelopment", dated .September 6,
1988, between the Housing and Redevelopment Authority in and for
the City of Richfield (HRA), the City of Richfield, (City) and
Donald A. Johnson (.Developer), with respect to construction of
the Improvements located on property described in the attached
Exhibit A in accordance with the approved Project Plans and is
released and forever discharged #rom his obligations to construct
the Improvements under such above-referenced Article.
DATED:
1990
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
•
By:
Its: Commission Chairperson
By:
Its:
Executive Director
EXHIBIT A
PROPERTY DESCRIPTION
Lot 13, Block 10, Tingdale Brothers Lincoln
Hills Second Addition, Hennepin County,
according to the recorded plat thereof
and
Lot 10, Hlock 10, Woodlake Highlands
Addition, Hennepin County, according to the
recorded plat thereof.
~7
•
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 18
Agenda July 16, 1990
Issue Statement•
Adoption of a resolution authorizing submission of an application
to HUD which requests an allocation of Section 8 housing payment
assistance.
Background•
HUD has recently announced the availability of a limited number
of Section 8 Rent Assistance Vouchers on a competitive basis.
The application is due July 26, 1990.
Since late 1988 at the direction of the HRA, staff has worked in
cooperation with the Area HUD Office and the Metropolitan Council
HRA (Metro) to complete the transfer of the Section 8 program to
Richfield. This latest offering of units by HUD provides an
opportunity for this process to continue. To date, Richfield has
secured 208 vouchers and continues to administer a Metro HRA
certificate program with 77 clients.
To fulfill the objective of complete program independence from
Metro, it would be appropriate to finalize the program transfer
.and request 77 vouchers. (Determinations made by HUD during the
competitive process may modify the number of units provided,
however.)
Recommended Motion:
Adopt the attached resolution authorizing an application and
other documentation to be submitted to HUD to secure additional
Section 8 housing assistance.
Basis for Recommendation:
1. The HRA and City Council have previously directed staff to
proceed with the establishment of an independent program.
2. Section 8 housing assistance cannot be secured from HUD
without submitting the application.
3. Officials representing HUD and Metro HRA are cooperating
in the application for and exchange of benefits to
Richfield households and it is anticipated this will
continue to occur.
4. Staff has completed a review of financial data from
1989 the first fiscal year of the independent
program. It is estimated that an additional 50 to 75
units would provide a break even budget.
5. An additional 77 units would complete the transfer of
existing Metro HRA clients to the Richfield Program.
Alternative Recommendation:
Direct staff to not submit the application. However, this will
prolong the time it takes to become totally independent.
Discussion/Decision Mode:
An application would be prepared and submitted by July 26, 1990,
the due date. The HRA would consider contracts-for specific
dollar and unit amounts following notification of an allocation
from HUD.
Res ~ ful su fitted,
R~
Ste De c
Acting Execut ve Director
SLD:ds
•
•
HRA RESOLUTION N0.
RESOLUTION RELATING TO AUTHORIZING HOUSING
PAYMENT ASSISTANCE APPLICATION
WHEREAS, the Housing and Redevelopment Authority, in and for
the City of Richfield (Richfield HRA) has the desire and
capability to contract directly with the United States Department
of Housing and Urban Development (HUD) to provide housing
assistance in the City of Richfield; and
WHEREAS, HUD, on August 2, 1988, has determined that the
Richfield HRA is legally organized under Minnesota State Law; and
WHEREAS, HUD and the Metropolitan Council HRA are
cooperating in ensuring a successful transition to an independent
program for Richfield; and
WHEREAS, an allocation can be processed by HUD provided the
Richfield HRA authorizes preparation of an application and
supporting financial and administrative documents; and
WHEREAS, an application to provide housing assistance to
approximately 77 households will be prepared by housing staff and
submitted for consideration.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority in and for the City of Richfield, that
the Executive Director is authorized to submit to the United
States Department of Housing and Urban Development an application
and other documentation in continuing support of a request for
housing assistance payments to serve Richfield residents.
Passed by the Housing and Redevelopment Authority of
Richfield this 16th day of July, 1990.
Thomas E. Harms, Chairperson
ATTEST:
Joan Helmberger, Secretary
•
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 19
Agenda July 16, 1990
Issue Statement:
Approval of the Expanded New Home Program and request of the City
Council to approve and provide financing.
Background•
On June 18, 1990, the HRA reviewed and discussed a proposal for
expanding the New Home Program. Following discussion,- a motion
was adopted requesting the Planning Commission to review the
.redevelopment and TIF Plans. They were also requested to review
the proposed acquisition and disposition of property to implement
the Plans.
On June 26, 1990, the Planning Commission adopted resolutions
number 74 and 75. The resolutions found the Plans and proposed
acquisition and disposition of property by the HRA to be in
conformance with the Comprehensive Plan.
It is now appropriate for the HRA to consider approving the
establishment of the program.
This letter and attachments provide a description of the program.
The attachments include:
HRA Resolution;
Time and Activity Schedule;
Summary of Housing Conditions; and
Summaries of the following:
Procedural Guidelines
Redevelopment and Tax Increment Plans
The complete documents follow the summaries.
*Objectives:
The two basic objectives of the Expanded New Home Program are to:
1) create_a voluntary market for substandard poor quality
housing; and
2) provide sites for new homes with features popular in
today's housing market.
*FinancinQ•
Financing of program activities would be provided by three
sources; 1) City funds, 2) proceeds of sale from developers, and
3) tax increment.
The HRA would utilize City funds to purchase a property. Shortly
after completing the purchase, the property would be sold to a
developer. The difference between the purchase price paid by the
HRA and sale price paid by the developer would be returned to the
City by the HRA through the tax increment (TIF) over a period of
up to 25 years.
Since the June HRA meeting, staff has continued to evaluate the
properties to be purchased and the value of new homes. The
evaluation has resulted in an adjustment of the anticipated TIF.
The other anticipated revenues and expenses have not changed.
Further, the historical valuation data from Hennepin County has
not changed and continues to indicate that appreciation during
the coming 25 years should continue to be sufficient to at least
break even.
-.Estimated start up funding from
City to purchase up to 27 properties 51,.620,950
- Estimated proceeds of sale from developers S 797,500
- Estimated net amount to be repaid by TIF $ 823,450
The TIF of 5823, 450 would be paid over a period of 23 years with
an average annual increase of 2$ in market value of the homes
constructed. At the 15th year, the outstanding balance would be
5343,011; in the 20th year the balance would be 5115,532; and in
the 23rd year the balance would be $0. If the market value
remained unchanged over 25 years, the TIF would fall short by
5117,713. Note however, that a Hennepin County analysis
indicates that over the last five years, single family home
values in Richfield have cumulatively increased approximately 10$
(average of 2$ per year), and over the last ten years, values
cumulatively increased 47$ (average of 4.7$ per year). If
property appreciation is greater than that required for repayment
of funds borrowed, interest would be paid.
An additional comment related to financing. The 1990 legislative
session has tied Local Government Aid (LGA) to the amount of tax
increment generated by a newly established redevelopment tax
increment district. Beginning in the sixth year and continuing
through the 25th year of the TIF district, LGA is reduced in an
increasing amount. An analysis of this impact indicates that in
1996 the LGA reduction would approximate $600. It would peak in
2001 and continue at approximately $8,000 annually through the
25th year of the district. The total cumulative dollar reduction
is estimated at $109,000. The present value of the 5109,000
would approximate 519,000.
*Acquisition:
All property purchased by the HRA would be required to meet the
following criteria:
- Voluntarily offered for sale;
- Owner-occupied or vacant so as to avoid relocation payment;
- Substandard as to condition and/or obsolete as to design;
- A developer has agreed to purchase from the HRA;
- Value determined by appraisal report, offer to owner
based on the appraised value, and authorization by HRA to
purchase.
At the June 18 HRA meeting, staff was authorized to initiate
appraisal and title work on seven properties in an amount not to
exceed $7,000. This work has been initiated.
*Redevelopment•
Only competent experienced developers would be selected. It is
likely that approximately five or six developers would be
selected to construct up to 29 .houses; each being responsible for
approximately five homes.
A developer's agreement would establish the construction
schedule, minimum value of property after construction ($110,000
to $140,000), developer's willingness to sign an Assessment
Agreement and provide the HRA access to the property to demolish
the substandard and/or obsolete. house. (A separate .related
agenda item requests the HRA to authorize staff to solicit
demolition bids for the properties to be purchased.)
*MarketinQ•
Developers•would be responsible for marketing the new homes. At
this time, staff has already collected a listing of 11 households
which have expressed an interest in purchasing a new home.
Further, families with children enrolled in Richfield Schools may
offer a significant market. (The houses they would vacate may be
suitable for new families moving into the community). To that
end, on March 5, 1990, the Richfield Board of Education adopted a
motion in support of the proposed program and the use of TIF.
Recommended Motion:
Adopt the attached resolution which:
1. Approves the Redevelopment and TIF Plans A and B, and,
A-1 and 8-1 respectively; and the Procedural Guidelines;
2. Requests the City Council to:
i) hold a public hearing on July 23, 1990 at which the
redevelopment and TIF Plans would be considered;
ii) approve the plans, and
iii) provide interim financing.
Basis of Recommendation:
1. The proposal is consistent with the concept presented in
January, 1990.
2. The Planning Commission found the Plans and proposed
acquisition and relocation to be in conformance with the
Comprehensive Plan on June 26, 1990.
3. There is a market of voluntary willing owners who wish to
sell their substandard and/or obsolete homes.
4. There is evidence of a market for new larger contemporary
housing.
5. Conversations with Mr. Merlin Grant, President of Marvin H.
Anderson Construction Company and board member of the MN
Builders Association, indicate the program should be
marketable to developers.
6. Many of the program elements have been used previously in
both redevelopment and housing programs.
7. City monies to fund the program will be identified by staff
.and a proposal for their use in this program will be
presented to the Council for their consideration.
8. Existing staff resources are available to administer the
program and can be funded from the current HRA New Home
Program.
9. Legal counsel has reviewed the program and related documents
and found them to be in compliance with existing law.
10. On March 5, 1990, the Richfield School Board adopted a
resolution in support of this program concept.
Alternative Recommendation:
1. Modify the proposed program.
_ 2. Delay action until a future time.
3. Terminate any additional activit on the ro osal.
Y P P
Discussion/Decision Mode:
An objective of this program is to make it possible for
developers to initiate construction in late 1990. To do so, it
is necessary to adopt the proposed resolution on July 16, 1990.
(See attached schedule.)
Resp ct ully su mitt d,
~v}
Steve ev
Actin Executive Director
SLD:ds
[NHP-HRAResol]
HRA RESOLUTION N0.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION APPROVING THE REDEVELOPMENT PLAN$
AND TAX INCREMENT FINANCING PLANS FOR THE
EXPANDED NEW HOME - SCATTERED SITE HOUSING 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, ar~d 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 conducted a study of physical conditions
within Redevelopment Project Area "A" and Redevelopment
Project Area "B" (Project Areas) and has considered the
need for public assistance in order to encourage
development, redevelopment, and new construction of single
family homes.
1.03 The HRA has caused to be prepared a Redevelopment Plan for
Project Area "A", Redevelopment Plan for Project Area "B",
Tax Increment Financing Plan for Tax Increment District
"A-1" and Tax Increment Financing Plan for Tax Increment
District "B-1", dated July 16, 1990, all relating to the
Expanded New Home - Scattered Site Housing Program
(collectively, Plans), and on file with the HRA.
1.04 The executive director of the HRA on June 19, 1990
transmitted copies of the Plans to the school boards of
Independent School District No. 280, Intermediate School
District No. 287, .and the board of commissioners of
Hennepin County for review and comment and notified said
public bodies of the public hearings to be held on the
Plans by the City.
1.05 The Richfield Planning Commission has reviewed the Plans
and on the 26th day of June, 1990, concluded that 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 this program.
Section 3. Further Proceeding.
3.01 The HRA requests the City to hold the public hearings on
the Plans required by Minn. Stat. Section 469.028 and
Minn. Stat. Section 469.175, subd. 3 at the City Council
meeting of July 23, 1990, and recommends that the Plans be
approved by the City.
Section 4. Financing.
4.01 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 the
implementation of the Plans and pledges its cooperation
with the City in achieving the objectives of the Plans.
Adopted by the Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota this 16th day of
July, 1990.
Thomas E. Harms, Chairperson
ATTEST:
3oan Helmberger, Secretary
Expanded New Home Program
Activity Time Frame
HRA Meeting June 18, 1990
Review
Procedural Manual
Redevelopment Plan
Tax Increment Finance Plan (TIF)
Developer's Agreement
Request of Planning Commission
Find Redevelopment and TIF
Plans in Conformance with
Comprehensive Plan including
acquisition and disposition of
real estate
Planning Commission Meeting June 26, 1990
Findings regarding Plan Conformance
(See above)
HRA Meeting July 16, 1990
• Proposal to approve
Redevelopment and TIF Plans,
funding request and
Procedural Manual and request
City Council to hold public
hearing and approve Plans.
Public Bidding for Demo
Notice of Public Hearing published July 11, 1990
City Council public hearing on July 23, 1990
Redevelopment and TIF Plans and
consideration of proposal to approve
the Plans and funding arrangement.
Order Appraisals Begin July 24, 1990
Select Developers Aug. - Sept., 1990
HRA Authorization Sept. - Dec., 1990
Purchase Property
Sell Property
Developer Agreement
Special HRA Meeting Sept. 10
Construction Start Last quarter of
(120 day construction period 1990 continuing
per house). into 1991
Expanded New Home Program
Summary of Housing Conditions
During a recent eight day period, staff has had an opportunity to
inspect and evaluate properties offered to the HRA.
Over half of the homes inspected are located on the back of the
lot or have other insufficient setbacks. The average size of the
homes inspected. was 690 square feet. This is significantly
smaller than the average Richfield home at 930 square feet.
Property conditions vary widely. Some houses are vacant and not
habitable. Other homes are in substandard condition and/or
obsolete in design and use. Below are examples of specific
conditions noted:
Uninhabitable Structures
- Collapsed roof causing extensive water damage, animal and
insect infestation, mold and fungus growing on carpet and
walls.
- Essential structural support members rotted causing threat of
collapse in portion of house.
• - No subfloor under kitchen sink area, only dirt. This is
unsanitary and neither weather or rodent proof.
- A bathroom area created in a back hallway. The shower area
consists of plastic sheeting fastened to the wall with duct
tape. An uncleanable plywood sub floor is also not moisture
resistant and there is no bathroom sink.
Substandard Structures
- Space heaters as the only source of heat causing insufficient
heat distribution. Properties with space heaters are not
eligible for FHA, VA or conventional mortgage financing.
- Siding, trim and soffit areas with extensive deterioration and
rot. A significant amount of trim and siding would have to be
replaced just to provide a nailing surface for vinyl or
aluminum siding.
- Improper construction framing methods have caused sagging
floors, buckling walls, and functional problems with doors and
windows. Joists are undersized and over spanned, joists and
beams have been cut and not supported, and joists which
were embedded in the concrete foundation are now rotting.
- Hazardous electrical and plumbing system problems; plumbing not
vented allowing sewer gases into the house; flexible-waste and
gas lines are used which are prone to leaking; extensive use of
extension cords and improperly installed wiring create safety
and fire hazards.
Obsolete Structures
- Small cellar type basements with steep, narrow stairway access.
Standard laundry appliances are too large for stairway
openings. In one home, a three foot section of a main support
beam had been cut out to allow room for a small freezer
to be moved into the cellar. The support was never repaired
and the main beam is starting to twist causing structural
problems.
- Limited or no storage area. The absence of cellar and attic
storage. is common. Closet space is minimal and in some cases
no closets exist.
- Limited food preparation and storage. Small kitchens do not
accommodate the size of todays standard appliances.
Counter and cupboard space have been forfeited for standard
ranges and refrigerators.
- No dining area in kitchen or other room. Small living areas
have insufficient room for a dining table. Families, instead,
eat in a make shift manner in the living room.
- Inefficient room layout requires that bedrooms be passed
through to access the bathroom. In one instance, a bedroom
must be passed through to enter a second bedroom.
- Bedroom size does not accommodate a standard bed and dresser.
As a result sleeping spaces have been created in cellars or
attic areas which do not have adequate ceiling height, light
and ventilation, or egress.
It is difficult to evaluate homes based only on exterior
conditions. Acute cottage home from the street, may actually be
uninhabitable inside. A home with poor exterior maintenance and
conditions may actually be neat, clean and repaired inside.
Discussions with homeowners during the inspections indicated
their strong interest in selling through the Expanded New Home
Program. Generally, owners perceive difficulty in selling in the
marketplace because:
- homes cannot be conventionally financed; contract for
deed, seller financing is usually required.
- owners desire cash which can be used for a
replacement dwelling.
- many repairs are needed and owners are reluctant to incur
further out of pocket expense for a home that doesn't
provide pay back to the investment.
- a savings can be realized, minimal closing costs and no
realtor fees result by participating in the HRA program.
- owners are tired of substandard and inefficient housing
and "want out".
- the homes are the least desirable in the market place and
owners would prefer to rent the substandard dwelling to
someone else than stay.
H90-3-0129
•
Expanded New Home Program
• Procedural Guidelines
Summary
The "Procedural Guidelines" set forth the process to be followed
in administering the Expanded New Home Program. Many of the
procedures have been utilized in existing programs. The Table of
Contents lists the administrative subjects.
Pages one through six discuss the procedures to be followed in
selecting, evaluating and purchasing garage and cottage type
homes. All structures must be substandard and/or obsolete. The
actual purchase of a property and the dollars paid require
authorization by HRA. Tenant occupied property will not be
purchased because of the financial burden of relocation payments.
Owner-occupants must sign a waiver of relocation benefits. No
property will be purchased without having a developer who has
agreed to buy it from the HRA.
Beginning on page six and continuing through page ten are the
procedures related to developer selection, housing and site
design, and developer solicitations. Successful performance is
critical with this program, thus the Developer Selection Criteria
is designed to encourage only developers who have a successful
track record, are financially strong and build several homes a
year. For this program, each developer would construct five to
six homes. If there are more than enough developers for the
property available, selection will be made by lottery.
Procedures regarding sale of property to developers begins on
page ten. The sale price will be determined by a reuse appraisal
undertaken by an independent appraiser. To maximize the amount
of tax increment, a minimum market value will be established for
each parcel. The value will range from 5110,000 to $140,000. To
help determine the minimum market value a "neighborhood
evaluation" will be conducted by the appraiser as part of the
reuse appraisal. The basis for the sale will be a public hearing
and approval by the HRA of a developer's agreement.
The construction plan review is discussed on pages 11 and 12.
The HRA will be responsible for demolition of existing
structures. That process is discussed on pages 12 and 13. At
the time of sale of the property to the developer, the developer
will execute a license granting the HRA the right to enter the
property for demolition. Because construction will follow
shortly after demolition, and to minimize costs, the cellar or
basement spaces will not be backfilled or fenced, the sides will
be tapered.
All existing structures will be demolished. Sale of structures
for removal from the site will not be considered for reasons
outlined on page 14.
The last page number 15 contains statements regarding the
management of program funds.
At this time, all appraisal work will be handled by one firm, BCL
Appraisals, Inc. The "Procedural Guidelines" do not specify that
one firm must prepare both acquisition and reuse appraisals, nor
do the "Guidelines" specify the firm. However, BCL has provided
favorable pricing for the appraisals. Staff also worked with
them to formulate the "neighborhood evaluation" which is key to
the success of this program. Mr. Brad B~orklund is a principal
of this firm. He has consistently provided high quality
appraisals to the HRA.
R90-3-0147
•
•
Expanded New Home Program
Redevelopment and Tax Increment Plans
Summary
Rather than starting at the beginning of the Plan documents, the
first paragraph below is intended to explain the basic concept of
the Plans.
The Expanded New Home Program activities will be conducted from
within two large redevelopment projects known as Redevelopment
Project Area "A" and Redevelopment Project Area "B" (see page 34
or 68 for map both of which are the same). Each redevelopment
project area will have a tax increment district, Tax Increment
Redevelopment District "A-1" and Tax Increment Redevelopment
District "B-1" respectively. Each district will be composed of
parcels purchased by the HRA. They are located on the maps, page
34 or 68 and listed on pages 16 and 50. The same properties are
also listed on pages 35 and 69. The only parcels which could
become part of district "A-1" and "B-1", would be those listed.
No property will be purchased 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.
In project "A", there are 19 properties listed and project "B"
lists 8 for a total of 27. However, two of the parcels are
double lots. Twenty-seven properties are listed but 29 new
houses may be constructed.
The balance of the Plan documents are similar to those previously
reviewed and approved by the HRA and City Council for other
projects such~as the ILN and PASSS. A few of the more
significant features of the documents are briefly identified as
follows.
Because the activities in each project area are the same, the
documents for Redevelopment Project Area "A" and "8" 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-1" and
"B-1" 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 14 of the "A" document. They are
the same in all documents.
r~
L
The budgets for each project area appear in the Appendices' and
total $1,140,669 for project "A-1" page 37 and $480,281 for
project "B-1" page 71. The total estimated budget is $1,620,950.
The proposal is to create two TIF redevelopment districts with a
25 year life. The only increment captured by the two districts
would be that generated from the property on which new homes were
constructed. No bonds would be issued.
A perusal of the Table of Contents
and 10 and plan document "B" page
listing of all topics.
R90-Summary
in plan document "A" pages 9
43 and 44 will reveal a full
•
•
RICHFIELD
EXPANDED NEW HOME PROGRAM
PROCEDURAL GUIDELINES
7/16/90
•
•
Table of Contents
Page Number
Statement of Purpose ................... 1
Program Objectives ..................... 1
Definitions ............................ 1
Data Privacy ........................... 1
Seller Solicitation Procedures.......... 1
Property Selection Criteria ............ 2
Property Evaluation Procedures ......... 3
Acquisition Procedures ................. 5
Developer Selection Criteria ........... 6
Housing Design and Site Development
Criteria ............................... 7
Developer Solicitation Criteria ...... 9
. D
l
S
l
ti
eve
opers
e
ec
on Procedures ...... 9
Procedures for Sale to Developers .... 10
Property Closing Procedures ............ 11
Plan Review Process .................... 11
Procedures for Evaluation
and Demolition ......................... 12
General Program Marketing .............. 14
Internal Fund Management ............... 15
1~
Richfield
Expanded New. Home Program
Procedural Guidelines
Statement of Purvose
This document has been developed as a guidance tool for Program
Administration. This document should not be interpreted as
constituting any contractual. agreement or liability by the City
or HRA.
Program Objectives
- Replace small lower value housing on scattered sites
throughout the City with larger, new, higher value housing
designed for families.
- Eliminate the blighting influence of substandard housing,
thus improving residential neighborhoods.
- Alleviate the shortage of standard housing for families.
These objectives will be achieved through the acquisition of
property and the development of new single family homes.
• Definitions
HRA - Housing and Redevelopment Authority in and for the
City of Richfield
Voluntary Acquisition - The acquisition (purchase) of real
property which results from a voluntary proposal to sell
from an owner in response to an invitation or
solicitation for offers.
Developer - Developer or Builder who has entered into a
Development Agreement with the HRA to purchase
specific lots and develop them with new single family
homes.
Data Privacy
All files and information which identifies property and persons
is private and cannot be released. All information secured
through the program is subject to the Data Privacy Act.
Seller Solicitation Procedures
1. HRA staff will solicit for sellers by direct mail,
advertisement, or other method. The number of
properties purchased will be determined by the availability
of resources and properties.
1
2. Sale to the HRA must be on a voluntary basis. Interested
sellers are required to respond to the HRA solicitation in
writing, with an offer indicating:
a. An interest in selling their property to the HRA.
b. A willingness to waive relocation benefits.
c. Statement of tenant interest in the property at the
time of offer.
d. Consent to the release of relevant information to
potential developers.
3. Owners that have been surveyed and have an interest in
selling must be contacted to inform them of the project
time line and solicit the required written response.
Property Selection Criteria
HRA staff will prepare property fact sheets for properties which
owners have expressed an interest in selling, and make a driveby
inspection. Properties will be evaluated based on the following
criteria. To be eligible for acquisition properties must meet
criteria #1 a, b, c or d; and #2, through #6.
1. The property is:
a. Substandard as to condition, size or usage. •
b. Obsolete and faulty design for block and area in which
it is located.
c. A deteriorating factor which has caused blight to other
adjoining properties.
d. Detrimental to the safety or health of abutting
properties in the block.
2. The estimated market value of the property is within
appropriate limits established by the HRA for tax increment
feasibility. An effort will be made to acquire the lowest
value properties first. Neighborhoods should be able to
support a minimum sales price of $110,000 for new
construction.
3. The site can be developed with a single family home
within city code requirements, including zoning and
conformance with the Comprehensive Plan.
4. The property must be owner-occupied or vacant before the
owner should consider offering it to the HRA. Tenant
occupied properties will not be considered for purchase.
5. The relationship of the property to other projects does not
cause a negative impact on development. Other projects to
be considered are:
2
a) Established Commercial Redevelopment areas.
b) R-O-W improvement projects.494/35W/62nd/77th/66th/other
c) Airport noise exposure zones:
- 65 to 69 Ldn
- 70 to 74 Ldn
d) Storm Water Flood Prevention Improvements Projects.
e) Other
6. Prior to acquisition by the HRA, properties must be
evaluated for historical significance. This will be
accomplished by forwarding general property information
and a property photo to the Minnesota Historical Society for
review. This should be confirmed prior to signing a purchase
agreement. The HRA will not purchase property which
qualifies for the National Registry of Historical Structures.
Property Evaluation Procedures
1. Based on the above information, HRA staff will identify the
best candidates for 'acquisition. The following will be
considered in that evaluation:
a. Properties must be immediately available to meet the HRA
development time frame.
b. Properties with one or more of the following
• characteristics should be considered first:
- lowest values
- poorest visible conditions
- located in average to better neighborhoods
c. Properties .purchased should be equally distributed by
location and value through the districts when possible
and provide a viable financial mix of properties to
support program financial requirements.
Given the above considerations, each site will be evaluated
on a case by case basis.
2. Once an offering letter is received, HRA staff will contact
the owners of the properties and arrange an inspection of the
interior for blight qualification. The following information
will also be obtained during the this inspection:
a. Demolition specification information (See Procedures
for Evaluation and Demolition).
b. A determination as to the existence of any hazardous
materials on the property. This includes:
- a visual inspection
- a statement from the seller regarding any knowledge
of the properties use for production, storage, deposit,
or disposal of any toxic or hazardous wastes or
substances or asbestos products whatsoever, during the
time seller owned property and prior to the date of
3
seller purchased property. Properties with
environmental problems or hazards may be considered if
the purchase price is reduced sufficiently to cover
increased site clearance and preparation costs.
3. If a property meets the blight test, acquisition procedures
will continue. If the blight test cannot be met, the
property cannot be considered for acquisition.
4. For properties meeting the blight test, sellers will be
asked to provide the Abstract or RPA (as applicable) to the
HRA to facilitate the rendering of a Title Opinion. The cost
of updating the Abstract or RPA will be the sellers if a sale
occurs. If no sale occurs, the HRA will bear the entire cost
of updating the Abstract or RPA. The HRA will provide a
written receipt when receiving and returning an abstract
or RPA.
5. Legal Counsel will be responsible for having the Abstract
or RPA updated and will contact staff as quickly as possible
with an oral opinion of title. A written opinion will
.follow shortly thereafter.
6. If the Title Opinion indicates the property has marketable
title, purchase procedures will continue. If the Title
Opinion does not indicate a marketable title, the HRA, at
its sole discretion, may choose not to acquire the property.
The HRA may determine remedies and evaluate their
resolution, including the additional time and expense to
provide marketable title. The HRA may proceed to correct
title deficiencies once a Purchase Agreement is executed.
by the seller.
7. If a variance is required to redevelop the property, the
HRA may, at its sole discretion, chose not to acquire the
property. This determination will be made based on the
project time lines, available resources, and availability
of more desirable properties which do not require a variance.
8. If the HRA chooses to continue with the acquisition, a fee
appraisal will be ordered to determine the purchase price
of the property (to present to the seller), and the reuse
value as a vacant lot, and a finished price range
for new single family construction (to present to the
developer).
The independent fee appraiser will be carefully instructed
to document in specific terms the conditions of the
property; details regarding structural condition and
floor plan. The acceptance of these conditions in the
market place should be discussed in the report. The
appraisers value judgement should reflect these conditions.
4
9. In some instances the. Title Opinion and fee appraisal may be
obtained simultaneously to facilitate a timely acquisition.
Acquisition Procedures (Sale to HRA)
1. When a purchase price has been determined, the seller
will be informed of:
a. The .purchase price
b. How the purchase price was determined.
c. If negotiations fail, and the offer is not accepted,
the HRA will not acquire the property.
2. A development agreement must be executed by the selected
developer prior to the purchase agreement being signed by the
seller. No property will be considered for acquisition
by the HRA unless the development agreement and purchase
agreement have been signed by the developer and seller
respectively.
3. Once a negotiated price has been reached, a purchase
agreement and "waiver of relocation payment" form
must be executed by the seller for the acquisition process to
continue. The relocation benefits which the seller agreed to
waive must be clearly explained at this time if not explained
previously.
• 4. Following execution of the purchase agreement by the
seller, demolition specifications can be developed.
5. The Richfield Planning Commission must determine whether
the acquisition and disposition of the property is in
conformance with the Richfield Comprehensive Plan. Several
properties may be simultaneously presented to the Planning
Commission for review. (This is an administrative finding
that does not require public hearing).
6. The HRA will be requested to simultaneously authorize:
a. Purchase Agreements
b. Development Agreements
c. Public Hearing of Disposition to Developer
d. Initiation of Demolition Bidding
(Agreements for several properties may be presented
to the HRA at one time).
7. Following HRA authorization of these agreements:
a. A simultaneous closing will. be scheduled with the
seller, HRA. and Developer.
5
b. Developer will be requested to provide evidence of .
insurance and financial security prior to closing.
c. Seller will be requested to assemble or supply all
required documentation prior to closing.
d. The public bidding process for demolition will be
initiated.
8. The seller must be prepared to vacate the property on the
day of closing.
9. The developer shall pay for the vacant lot and provide
final evidence of insurance and financial security at
closing. (See Development Agreement requirements and
Procedures for Developer Selection and Sale to Developers).
Special considerations during the acquisition process:
a. Non-homestead vacant property will be considered for
acquisition.
b. Tenant occupied property cannot be acquired.
c. Property expenses related to maintenance, taxes, and
insurance, are not anticipated since the HRA will not
retain title to the property. .
d. Review appraisal services may be part of the
negotiating process to determine purchase price if the
fee appraisal report values the property below the current
assessor's market value.
e. Annual number of acquisitions is influenced by available
resources (funding and staff).
Developer Selection Criteria
Private developers will be selected by the HRA to construct new
single family homes on identified lots. Developers must meet the
following requirements:
1. Demonstrate financial capability by:
a. A statement from a financial institution of available
construction capital; and
b. A letter of credit; or
c. A performance bond; for the value of the construction.
2. Provide favorable references from:
a. Five satisfied customers.
6
•
b. Three major suppliers, one being the construction
lumber supplier.
3. Demonstrate proof of insurance as specified in Developers
Agreement.
4. Possess H.O.W. insurance or equivalent to perform warranted
repairs required by MN State statute.
5. Agree to the terms of the Development Agreement.
6. Agree to complete construction within the time frame
specified in the Development Agreement. Every effort
will be made to complete construction by December 31st of
the construction year, for purposes of tax increment
capture.
7. Preferential consideration will be made to developers
meeting the following requirements:
a. Have experience working on infill projects.
b. Have been a member of the Minnesota Builders
Association (MBA) for the previous three (3) or more
years; or be able to have met their requirements for
the previous three years.
•
c. Have a demonstrated record of building at least three
(3) homes a year for the past five (5) years. (See
item 2, above)
Housing Design and Site Development Criteria
Siding, exterior facade presentation, roof, window, siding and
building line variability, finished landscape, interior space
function and use are all important considerations.
The development of all sites shall meet the development
objectives listed below. The guidelines were created to insure
that the homes built on the identified lots blend in with the
surrounding neighborhood and respond to specific concerns of the
HRA.
1. General:
a. Each home shall be single-family, owner occupied.
b. The value of each new home must meet or exceed the
value specified for each property in the development
agreement.
•
2. Site Standards:
7
a. The grounds shall be finish landscaped to be
aesthetically pleasing in all seasons. Land forms and
plants materials shall be used to define the site and
blend with adjoining property.
b. Utility meters shall be screened from street view;
locations must be specified on plans.
3.
c. Site drainage shall be accommodated on the site so that
water is directed away from the new home and the
neighboring properties.
d. Existing trees shall be preserved when possible. Care
should be taken to preserve existing root systems. A
tree wrap, with board reinforcement shall be used on
trees directly adjacent to active grading and
construction areas.
e. The construction site, neighboring property and
adjacent public streets shall be kept free of
construction debris at all times.
Building Standards:
a. The home shall be a 3-4 bedroom, 2 bathroom structure.
b. A two car garage, attached or detached, must be
provided on the site for single family detached units.
A minimum of one enclosed parking space per unit will
be required for attached single family units.
c. Exterior materials (siding, soffit, doors and windows),
should be low maintenance. Aluminum and vinyl are
preferred. Natural cedar lap is acceptable if properly
stained or painted. Hardboard, whether panels or lap
siding, are not acceptable.
d. Unit height and mass of the new homes shall be
compatible with the scale of the surrounding
neighborhood.
e. A full basement shall be provided in the house unless
the selected design results in a split level, garden
level type of basement.
f. All building plans must have been prepared in
consultation with an Architectural Designer with a
minimum two year technical degree. An Architect may
also be consulted.
g. All construction must conform to the Sound Attenuation
Building Standards for properties located in 65-69
and 70-74 'Ldn zones. A copy of the Sound Attenuation
Building Standards Specifications will be provided
to developer building in those zones.
8
Developer Solicitation Criteria
1. The HRA will advertise in professional publications or
newspapers, by direct mail, or other methods as deemed
appropriate, to solicit developer interest. The initial
solicitation will include general program information,
specific properties will not be identified.
2. A program information package will be available upon
request to all interested developers. The information
package will include the following:
a. Developer requirements and application, (See Developer
Selection Criteria).
b. Program summary information to include:
- Program Objectives
- Housing Design Criteria
- Plan Review Process
- Developer Selection Process
- Demolition Process
- Procedures for Sale to Developer
- Construction Timeframe
c. Sample Development Agreement
d. Informational City Map indicating:
- School locations
- Parks
- Bus routes
e. A deadline for submission of application. Developers
will generally be given two weeks to complete and
return applications.
f. This package will not include specific property,
identification.
Developer Selection Procedures
1. Upon receipt of applications, HRA staff will evaluate
developers based on requirements set forth in the "Developer
Selection Criteria".
2. HRA staff may reject or accept proposals at its sole
discretion, so long as the developers selected adequately
meet the Developer Selection Criteria.
3. If the number of qualified developers exceeds the number of
available property groups, developers will be selected by
lottery.
•
9
4. The HRA will group lots for sale to developers as follows:
a. Groups will contain a minimum of 5 to 6 lots, when
possible.
b. To accomplish a balanced distribution of more and less
desirable lots, lots will be grouped together to provide
a mix of projected new home value opportunities in a
variety of locations.
5. Property groups will. be assigned to developers by lottery.
6. Alternate developers will also be selected..
Procedures for Sale to Developer
1. The vacant lots will be sold to developers at fair market
value as determined by HRA staff based on independent
appraisal.
2. A development agreement will be presented to the developer
for consideration. The development agreement is of a
standard form which includes conditions for acquisition and
development of property. One element of property
development is the Assessment Agreement which prescribes a
a minimum market value for each property provided to the
developer. Minimum values are presented in two ways:
a) Minimum Values per property
b) Minimum Value total for the package of properties
provided to the developer.
The HRA will provide recommended values per property
and per package.
The developer may review and accept or modify values per
property. However, total values per package may not be
modified.
3. The selected Developers will be required to execute
Development Agreements for each property being developed.
A purchase agreement can then be signed by the seller.
4. If the selected developer is not willing to sign a
Development Agreement for each property in the identified
group, the properties will be offered, to an alternate
developer.
5. The following items specified in the Development Agreement
will require discussion and negotiation with the developer:
- Construction start and completion dates.
- Guaranteed minimum value of property upon completion.
- Developers willingness to sign an Assessment Agreement.
10
- A license provided to the HRA for the purpose of
.completing demolition work.
- Design Criteria
6. Following execution of Purchase Agreements by the sellers
and subsequent Development Agreements by the Developer, the
HRA will be requested to authorize:
- Purchase Agreements
- Development Agreements
- Public Hearing on disposition of property
- Demolition public bidding process
7. Following HRA authorization of these items:
- The Public Bidding process for demolition will
be initiated.
- A simultaneous closing will be scheduled with the
seller, HRA and developer.
8. Prior to closing, the developer will be required to provide
evidence of insurance and financial capability as identified
in the Development Agreement.
Property Closing Procedures
A simultaneous closing will take place with the seller, HRA and
developer. The HRA ownership of the property will pass to the
developer at closing. The HRA will not retain title to the
property longer than the closing meeting. The following will be
required at the closing:
1. The seller will be required to provide a Warranty
Deed to the HRA.
2. The HRA will convey the property to the developer by
Quit Claim Deed.
3. The Developer must provide evidence that all post closing
agreement requirements to proceed with construction, have
been met. This includes but is not limited to insurance
documents and letters of credit. The letter of credit
will be an amount equal to the amount of the HRA net
contribution (acquisition price minus land value plus
site preparation costs).
4. A license on each property will be provided by the
developer to the HRA for the purpose of completing
demolition work.
5. The HRA will prepare all statements, affidavits,
documents, and general release forms required for
closing.
Plan Review Process
1. The following must be provided to the Building Official,
by the developer:
11
- Plans (2 copies)
- Land Survey (2 copies) with building elevations,
site drainage patterns and easements.
- Energy Calculations
- Any engineering plans (curb cuts, etc.) to be routed
through Building Official to the engineering division.
2. The Building Official will be asked to review plans for
structures located in the Ldn 65-69 and 70-74 for
conformance to sound attenuation building standards.
3. The Building Official will forward the plans to HRA staff
for review.
4. HRA staff will review all plans to assure conformance with
Housing Design and Site Development Criteria.
5. If any element of the plan is in conflict with the above
criteria, HRA staff will notify the Building Official. The
Building Official will notify the developer of any conflicts.
6. The developer must resubmit the revised plans for final
approval unless resolved to the satisfaction of the Building
Official by modification to original office copy of
submitted plans.
C7
7. Each plan review by HRA staff, will be completed in a timely •
manner. Review time approximates one week. Each plan
submitted will be processed individually. Upon completion
of review by the HRA, a review checklist will be signed
and attached to the plans, and the plans returned to the
Building Official.
8. HRA staff will refer the plans to the County Assessor to
make a preliminary determination of value based on plans
and amenity package.
9. The Developer, County Assessor, and the HRA will execute
an Assessment Agreement and Certification of Assessor for
each property, to guarantee the minimum development
value. This Agreement will run with the land until the
expiration date of the tax increment district.
10. Housing design and site development criteria have been
reviewed and approved by the HRA.
Procedures for Evaluation and Demolition of Structures
DEMOLITION•
The HRA will be responsible for demolition and site
clearance of acquired properties. Procedures are as follow:
12
1. Properties. will be inspected by staff for the purpose of
preparing a demolition specification. This inspection
shall be completed simultaneously with the blight
qualifying inspection. The following items will be
noted:
a. Property legal description and documents of record.
b. Approximate size of basement or cellar, structure
(copy of assessing drawing if available).
c. The existence or non-existence of a well.
d. Number of out buildings for removal - sheds,
garages, others.
e. Concrete walks, patios, driveways, and slabs.
f. Existing fences, retaining walls or any other
type of permanent landscape materials.
g. Miscellaneous yard debris, fixtures, landscape
timbers and stones, foundation plantings.
h. Existence of asbestos building materials.
i. Structural or other factors that will affect
demolition.
2. Contractors will be instructed to taper edges of all
excavated areas to an acceptable slope for safety,
keeping soil disturbances outside the building area to a
minimum. The slope will be a minimum of 2 to 1. There
will be no backfilling or fencing of excavated areas.
3. Individual demolition specifications will be prepared for
each property following the execution of a purchase
agreement. As many properties as possible
will be assembled as one package and bid as one fob
depending on the timing. A separate price will be
required for each property.
4. A Public Bidding Process will be used in the selection
of a contractor pursuant to Minnesota Statute 471.345.
The Public Bidding process shall begin immediately
following HRA authorization of purchase.
5. In addition to general advertisement, required by
statute, desired contractors will be solicited.
6. A Demolition Contract will be executed by the demolition
contractor and the HRA for structure removal and site
clearance as specified by the HRA. The Developer must
contract independently with the Demolition Contractor if
additional demolition work is desired.
7. Prior to site clearance an informational letter will be
sent to adjoining property owners to further explain
the program and anticipated development schedule.
Neighborhood meetings on a site by site basis are
not anticipated.
13
8. Demolition will be scheduled to occur as soon as possible
following the HRA sale of the property to a developer.
A license will be provided by the developer to allow
the HRA to complete demolition and clearance work on
the site.
9. Soil corrections and compaction will be the
responsibility of the developer.
10. The sale of structures to house movers will not be
considered based on the following:
a. The properties purchased are small and blighted,
generally not desirable to movers.
b. Movers require a minimum of 60 days following award
of bid, to remove a structure. House mover's
schedules and unanticipated weather conditions could
prolong this time. Delays cannot be accommodated
in the HRA's development schedule.
c. Movers would have minimal interest, if any, should
the HRA require structures to be removed from the
site prior to 60 days following the bid award.
d. The HRA would be required to follow public bidding
process for the house moving as well as remaining
demolition work. The time frame for this process
cannot be accommodated in the development schedule.
General Program Marketing
Marketing for the sale of the new homes will be the
responsibility of the developer.
Program marketing by the HRA will be limited to the following:
1. Developer solicitation.
a. The HRA will request proposals from developers
by advertising in professional publications or
newspapers, by direct mail, or other methods as
deemed appropriate.
2. Public Promotion.
a. The HRA will periodically provide information about
the program through articles or information pieces
in the "Your City, Your Schools" publication to
promote community awareness.
b. When possible, a public open house will be held to
provide an opportunity for residents and other
interested parties to collectively view the
finished homes.
c. Marketing through the schools.
14
Internal Fund Management
The program is financed with tax increment and other resources
made available to the HRA from the City. The following
conditions apply:
1) No bonds will be sold.
2) The City Council and HRA will designate the funding sources
which will be borrowed.
3) The funds will be made available in a separate account
to be drawn as needed to cover project expenses.
4) The funds that the HRA borrows will be repaid to the City
over a 25 year period if sufficient funds are generated
through Tax Increment. Interest may be paid if the funds
generated exceed the principal amount borrowed.
5.) The payment to the City from the HRA through tax increment
would be made following receipt of property tax
payments from Hennepin County.
L~
•
15
•
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR
THE CITY OF RICHFIELD, MINNESOTA
MASTER PLAN
EXPANDED NEW HOME -SCATTERED SITE
HOUSING PROGRAM
FOR
REDEVELOPMENT PROJECT AREA "A"
AND
TAX INCREMENT FINANCING DISTRICT "A-1 "
REDEVELOPMENT PROJECT AREA "B"
AND
TAX INCREMENT FINANCING DISTRICT "B-1 "
DATED: JULY 16, 1990
PREPARED BY:
The City of Richfield
Department of Community Development
Housing and Redeve/opment Division
6700 Portland Avenue South
• Richfield, MN 55423
~si2~ Bs~-9~so
MAYOR
STEVEN J. QUAM
CITY COUNCIL
Edwina Garcia
Martin Kirsch
Ivan Ludeman
Michael Sandahl
HOUSING AND REDEVELOPMENT AUTHORITY
Thomas Harms, Chair
Edwina Garcia
Joan He/mberger
Ivan Ludeman
Vern Luettinger
CITY MANAGER/EXECUT/VE DIRECTOR
James D. Prosser
•
PLANNING COMMISSION
Thomas Ohnesorge, Chair
Nancy Edwardson
Michael Gallagher
Robert Nelson
Morris Nilsen, Jr.
Lorraine Prind/e
Thomas Scaglia
William Snyder
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
Diane Nordquist
Community Development Technician
•
•
The Housing and Redevelopment Authority
in and for
The City of Richfield, Minnesota
Redevelopment Plan
for
Redevelopment Project Area "A"
and
Tax Increment Financing Plan
for
Tax Increment Redevelopment District "A-1 "
of the
Expanded New Home -Scattered Site
Housing Program
Dated: July 16, 1990
TABLE OF CONTENTS
Part L
Redevelopment Plan
.for
Redevelopment Project Area "A"
PAGE
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
F. Proposed Land Use 6
G. Ac uisition and Reloca i n A
q t o ctivities
6
H. Environmental Considerations 7
I. Redevelopment Plan Modification. 7
J. Administration of Redevelo ment Pro'ect
P J 7
Part ll.
Tax Increment Financing Plan
for
Tax Increment Redevelopment District "A-1 "
A. Statutory Authority 9
B. Statement of Objectives 9
C. Development Program 9
D. Description of Property in the
Tax Increment Financing District 10
E. Classification of the Tax Increment
Financing District 10
F. Parcels In Acquisition 12
G. Estimate of Costs 12
H. Estimated Amount of Obligated Funds. 13
(i)
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
O. Limitation on Administrative Expenses 14
P. Limitation on Duration of Tax Increment
Financing Districts 15
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
Appendix A: Map: Redevelopment Project Area "A". 25
Appendix B: Property in the Tax Increment
Redevelopment District "A-1" 27
Appendix C: Estimate of Tax Increments . 28
Appendix D: Tax Increment Financing Budget. 29
Appendix E: Estimate of Impacts on Other
Taxing Jurisdictions 30
(ii)
Part 1.
Redevelopment Plan
for
Redevelopment Project Area "A"
A. Statement of Public Purpose
It is found ,that there is not in this city a sufficient
supply of adequate safe and sanitary dwelling accommodations;
that in certain areas thereof there exist substandard conditions,
unsafe and unsanitary housing and buildings and structures used
or intended to be used for living; which by reason of
sociological and technological changes, dilapidation,
obsolescence, overcrowding, .and faulty arrangement or design. of
building and improvements, lack of public facilities,
ventilation, light and sanitary facilities, or deleterious land
use, or obsolete layout, or any combination of these and other
factors are injurious to the. health, safety, morals and welfare
of the citizens of this state; cause an increase and spread of
crime, juvenile delinquency and disease, inflict blight upon the
economic value of large areas; threaten the source of public
revenues while decentralizing communities to areas improperly
planned and not related to public facilities; and require
citizens to occupy unsafe, unsanitary and overcrowded dwellings.
Therefore, in order to respond to public interest and protect
the overall economic stability of the housing area, redevelopment
of neighborhoods is required to create an economic environment
which fosters the growth of a healthy residential base and
encourages private enterprise to engage in redevelopment and new
construction to be implemented in accordance with a comprehensive
community plan. The Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota (HRA) and the City Council
of the City of Richfield, Minnesota (City) have determined that
public intervention is necessary in Redevelopment Project Area
"A" (Project Area "A") of the Expanded New Home - Scattered Site
Housing Program (Housing Program) in order to achieve goals and
objectives for the area.
8. Statutory Authority
The statutory authority for the undertaking of a
redevelopment project in Project Area "A" and the activities
proposed in the redevelopment plan relating thereto is conferred
upon the HRA pursuant to and in accordance with the Housing and
Redevelopment Authorities Act, Minn. Stat., Sec. 469.001 to
469.047, inclusive, as amended. Specifically, Minn. Stat., Sec.
469.027 establishes the requirements for redevelopment plan
preparation by an HRA prior to undertaking property acquisition,
redevelopment, development and other related improvements.
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C. Description of the Redevelopment Project Area
In order to guide development and redevelopment in Project
Area "A", the HRA has created this redevelopment plan. Pursuant
to Minn. Stat., Sec. 469.002, subd. 12, the proposed project
meets the definition of a redevelopment project, defined in Minn.
Stat., Sec. 469.002, subd. 14, and will henceforth, be referred
to as the redevelopment project. The boundary for Project Area
"A" encompasses all that real property within an area described
as follows:
Beginning at the intersection of the southerly right-of-way
line of East 62nd Street and the easterly right-of-way line
of 11th Avenue South, thence, in a line easterly more or
less, along said southerly right-of-way line to its
intersection with the westerly right-of-way line of
Bloomington Avenue South. Thence, southerly along said
westerly right-of-way line to its intersection with the
southerly right-of-way line of East 63rd Street. Thence,
easterly along said southerly right-of-way line to its
intersection with the easterly right-of-way line of 16th
Avenue. Thence, southerly along said easterly right-of-way
to its intersection with the northerly property line of Lot
2, Block 1, Iverson's Second Addition. Thence, easterly
along said northerly property line, as extended, to its
intersection with the westerly right-of-way line of 18th
Avenue South. Thence, southerly along said westerly right-
of-way line to its intersection with the southerly right-
of-way line of Diagonal Boulevard. Thence, southwesterly
more or less, along said southerly right-of-way line to its
intersection with the southerly right-of-way line of East
73rd Street. Thence, westerly along said southerly right-
of-way line to its intersection with the easterly property
line of Lot 5, .Block 4, Henry Thernell Addition. Thence,
southerly along said easterly property line, as extended,
to its intersection with the northerly right-of-way line of
East 76th Street. Thence, westerly along said northerly
right-of-way line to its intersection with the westerly
property line of Lot 4, Block 8, Sunset Terrace. Thence,
northerly along said westerly property line, as extended,
to its intersection with the northerly property line of Lot
8, Block 8, Sunset Terrace. Thence, westerly along
northerly property line, as extended, to its intersection
with the easterly right-of-way line of Lyndale Avenue
South. Thence, northerly along said easterly right-of-way
line to its intersection with the southerly right-of-way
line of West 74th Street. Thence, westerly along said
southerly right-of-way to its intersection with the
easterly property line of Lot 26, Block 25, Irwin Shores.
Thence, southerly along said easterly property line, as
extended, to its intersection with the northerly right-of-
way line of West 76th Street. Thence, westerly along said
northerly right-of-way line to the intersection with the
westerly right-of-way line of Fremont Avenue South.
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Thence, northerly along said westerly right-of-way line to
its intersection with the northerly right-of-way line of
Humboldt Avenue South. Thence, northwesterly and northerly
more or less, along said northerly right-of-way line to its
intersection with the southerly right-of-way line of West
73rd Street. Thence, easterly more or less,- along said
southerly right-of-way line to its intersection with the
easterly right-of-way line of Lyndale Avenue South.
Thence, northerly more or less, along said easterly right-
of-way line to its intersection with the southerly right-
of-way line of West 68th Street. Thence, easterly along
said southerly right-of-way line to its intersection with
the easterly right-of-way line of Pleasant .Avenue South.
Thence, northerly along said easterly right-of-way line to
its intersection with the northerly property line of Lot 7,
Block 2, Ralph Hollenbach's First Addition. Thence,
easterly along said northerly property line, as extended,
to the easterly right-of-way line of Wentworth Avenue
South. Thence, southerly along said easterly right-of-way
line to its intersection with the northerly property line
of Lot 6, Block 2, Oaklane Addition. Thence, easterly
along said northerly property line, as extended, to its
intersection with the westerly right-of-way line of
Blaisdell Avenue South. Thence southerly along said
westerly right-of-way line to its intersection with the
southerly right-of-way line of West 68th Street. Thence,
easterly along said southerly right-of-way line to its
intersection with the easterly right-of-way line of
Nicollet Avenue South. Thence, northerly along said
easterly right-of-way line to its intersection with the
northerly right-of-way line of East 67th Street. Thence,
easterly along said northerly right of way line to its
intersection with the easterly right-of-way line of First
Avenue South. Thence, northerly along said easterly right-
of-way line to its intersection with the southerly right-
of-way line of East 66th Street. Thence, easterly along
said southerly right-of-way line to its intersection with
the easterly right-of-way line of 11th Avenue South.
Thence, northerly along said easterly right-of-way line to
the point of beginning.
(Also refer to Appendix A, Map: Project Area "A".)
D. Statement of Goals and Objectives
The HRA determines that it is necessary, desirable, and in
the public interest to undertake a redevelopment project in the
City pursuant to the provisions of Minn. Stat., Chapter 469, as
amended. The HRA determines that the funding of the necessary
activities and improvements in the redevelopment project area
shall be accomplished through the use of tax increment financing
and other revenue sources available to the HRA and City.
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The following goals and objectives are intended to serve as a .
basis for guiding activities in the redevelopment project area:
1. To develop strategies to encourage development and
redevelopment of single family homes.
2. To maintain a positive environment within the residential
community. ,
3. To enrich the quality of life for residents through
planning.
4. To recognize the needs of all segments of the populace
through diversity in housing stock which is a major
determinant of the living environment.
5. To achieve a high level of design quality to enhance the
physical environment.
6. To achieve a balanced variety of housing stock
appropriate to the market area.
7. To enhance the residential tax base of the community.
8. To protect the surrounding residences from the adverse
effects of dilapidation and deterioration.
9. To eliminate unsightly, blighting, deteriorated, and
substandard structures.
10. To provide an expanded range of housing opportunities of
sufficient quality and size through development,
redevelopment and new construction.
11. To provide maximum opportunity, consistent with the needs
of the city for development by private enterprise.
12. To coordinate elements of the City's Comprehensive Plan
with these project objectives.
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 secr• 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
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in order to support the private development activities include:
1. Property acquisition;
2. On-site clearance;
3. On-site improvements;
4. Remedial site environmental activities; and
5. 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.
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 the developer. The general
requirements to be imposed upon the developer 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.
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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; and
- Quasi-public (e.g. churches, cemetery, nursing homes,
private schools, and service organizations).
New uses will be restricted to single family residential.
G. Acquisition and Relocation Activities
1. Acquisition
As a means of comprehensively formulating an expanded New
Home Program, HRA staff recently undertook the following
tasks to identify property for acquisition:
a. Analysis of residential property tax records with
estimated property values less than or equal to
$55,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
The following property has been identified for
acquisition for Cycle I of the program:
PID NUMBER
26-028-24-11-0024
26-028-24-12-0083
26-028-24-12-0087
26-028-24-12-0114
26-028-24-13-0046
ADDRESS
6351 Bloomington Ave. So.
6332 - 15th Ave. So.
6349 - 14th Ave. So.
6325 - 15th Ave. So.
6425 - 15th Ave. So.
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•
•
26-028-24-13-0047 6415 - 15th Ave. So.
26-028-24-13-0049 6407 - 15th Ave. So.
26-028-24-13-0051 6400 - 15th Ave. So.
26-028-24-13-0079 6518 - 15th Ave. So.
26-028-24-13-0102 6538 Bloomington Ave. So.
26-028-24-13-0115 6501 - 15th Ave. So.
26-028-24-14-0096 6401 Bloomington Ave. So.
26-028-24-14-0116 6507 Bloomington Ave. So.
27-028-24-42-0068 6612 - 2nd Ave. So.
33-028-24-42-0014 7435 Emerson Ave. So.
34-028-24-11-0079 7039 - 5th Ave. So.
34-028-24-12-0085 7129 - 1st Ave. So.
34-028-24-13-0094 7216 - 1st Ave. So.
34-028-24-14-0041 7320 - 5th Ave. So.
2. Relocation
The HRA accepts as binding its obligations under
provisions of federal and state law (Minn.. Stat., Sec. 117.50
through 117.56) for relocation.
H. Environmental Considerations
Generally, the redevelopment project area is developed. All
proposed public and private development resulting from this plan
will be evaluated against existing environmental regulations.
I. Redevelopment Plan Modification
All redevelopment plan modifications will be processed in
accordance with Minn. Stat., Sec. 469.029, subd. 6.
J. Administration of Redevelopment Project
The redevelopment project and related housing program will be
administered by the Richfield Housing and Redevelopment
Authority.
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(Intentionally Left Blank)
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Part U
Tax -ncrement Financing Plan
for
Tax Increment Redevelopment District "A-1 "
A. Statutory Authority
The statutory authority for the undertaking of a tax
increment financing district (TIF District "A-1") in
Redevelopment Project Area "A" (Project Area "A") for 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.
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 an expanded New Home
Program. In order to gauge interest in the new program and
initially identify residential property for program
participation, the following tasks were undertaken:
a. Analysis of residential property tax records with
estimated property values less than or equal to
$55,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
A comprehensive, integrated approach for acquisition,
site clearance, and new construction has been formulated and
will be provided through program guidelines. The HRA will
assist prospective developers with development,
redevelopment, new construction, and other related activities
within the context of this Plan, the Redevelopment Plan and
other related guidelines.
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2. Development Activities Covered by Contract
Currently, there are no development contracts.
3. Other Development Not Under Contract Reasonably Expected
to Occur in-the Proiect.
Proposals from prospective developers will be required to
be submitted to the HRA as part of the review process. The
following activities may be expected to occur:
1. Property Acquisition;
2. On-site clearance;
3. On-site improvements;
4. New construction;
5. Remedial site environmental activities; and
6. Adjacent public improvements and. utilities which
service site.
For Cycle I of the Housing Program, a total of 27
properties have been identified for program participation and
acquisition. Nineteen of the properties are located within.
Redevelopment Project Area "A" while the remaining eight are
within Redevelopment Project Area "B". (Refer to Appendix A
for map of Redevelopment Project Areas.) Redevelopment
Project Area B contains two properties with double lots. With
property subdivisions, two additional homes will be
constructed. Initial construction for Cycle I is anticipated
to begin toward the end of the last quarter of calendar year
1990, with construction for each home to run 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-1" 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
the district to be established within Project Area "A" is a
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redevelopment tax increment financing district as defined in
Minn. Stat., Sec. 469.174; subd. 10:
It has been ascertained 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.
""Structurally substandard" shall mean containing
defects in structural elements or a combination of
deficiencies in essential utilities and facilities,
light and ventilation, fire protection including
adequate egress, layout and condition of interior
partitions, or similar factors, which defects or
deficiencies are of sufficient total significance to
justify substantial renovation or clearance."
"A building is not structurally substandard if it is in
compliance with the building code applicable to new
buildings or could be modified to satisfy the building
code at a cost of less than 15 percent of the cost of
constructing a new structure of the same square footage
and type on the site. The municipality may find that a
building is not disqualified as structurally
substandard under the preceding sentence on the basis
of reasonably available evidence, such as the size,
type, and age of the building, the average cost of
plumbing, electrical, or structural repairs, or other
similar reliable evidence. If the evidence supports a
reasonable conclusion that the building is not
disqualified as structurally substandard, the
municipality may make such a determination without an
interior inspection or an independent expert appraisal
of the cost of repair and rehabilitation of the
building."
Since the tax increment parcels within the scattered site
program are rron-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 "Expanded New Home - Scattered Site
Housing Program: Blight Qualification Survey" which will be on
file at City Hall for the duration of the tax increment
district's life.
•
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F. Parcels in Acquisition
The following property has been identified for acquisition:
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 6325 - 15th Ave. So.
26-028-24-13-0046 6425 - 15th Ave. So.
26-028-24-13-0047 6415 - 15th Ave. So.
26-028-24-13-0049 6407 - 15th Ave. So.
26-028-24-13-0051 6400 - 15th Ave. So.
26-028-24-13-0079 6518 - 15th Ave. So.
26-028-24-13-0102 6538 Bloomington Ave. So.
26-028-24-13-0115 6501 - 15th Ave. So.
26-028-24-14-0096 6401 Bloomington Ave. So.
26-028-24-14-0116 6507 Bloomington Ave. So.
27-028-24-42-0068 6612 - 2nd Ave. So.
33-028-24-42-0014 7435 Emerson Ave. So.
34-028-24-11-0079 7039 - 5th Ave. So.
34-028-24-12-0085 7129 - 1st Ave. So.
34-028-24-13-0094 7216 - 1st Ave. So.
34-028-24-14-0041 7320 - 5th Ave. So.
The tax increment district budget includes acquisition costs
for subsidy purposes which .will be offered to developers 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.
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r
H. Estimated Amount of Obligated Funds
At the current time, approximately $l million is available to
implement this program. Repayment of these funds will be through
the use of tax increment financing and other sources of revenue
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.
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 "A-1" is based on the January 2, 1990 assessed value
placed on the property by the county assessor. The OTC for the
district is $17,730. (See Appendix B, Property Located in Tax
Increment Financing District "A-1".) 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.
•
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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
$849 to $1,677 per home. The total CTC for 19 new homes within
the project area ranges from $16,131 to $31,863. As a result of
the improvements to be constructed, it is expected that the.
estimated captured net tax capacity will be available for the
housing program. It is also anticipated that this amount will be
captured not more than 25 years. (See Appendix C, Estimate of
Tax Increments).
L. Duration of the District
.Pursuant to Minn. Stat., Sect. 469.176, subd. 1, the maximum
duration of a redevelopment tax increment district is 25 years.
The HRA elects to capture 100$ 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
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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.
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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
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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
-17-
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
-18-
• 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
-19-
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 "Expanded New Home - Scattered Site
Housing Program: Blight Qualification Survey"
which will be on file at City Hall 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
-20-
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
prospective developers 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, prospective developers 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 an expanded New Home
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.
.7
-21-
(Intentionall Left Blank
Y )
•
•
-22-
APPENDICES
Expanded New Home -Scattered Site
Housing Program
Redevelopment Project Area "A"
and
Tax Increment Financing District "A-1 "
•
•
-23-
(Intentionally Left Blank)
•
•
-24-
APPENDIX A
MAP
REDEVELOPMENT PROJECT AREA "A"
•
-25-
m J OJI U > J N J _ pJ m O~ r T T OI
_ ~ _ _ O ~_ m _ A N A
as > > : z o o .. ~ i s ~ i i z
A ti ti ~ -/ y ti 1 ~ N y 1 ~ .NI y
XER%ES AVE ~f ._ ~ f lip ~ .
4( , ,~ ,' ~ _ _ I I IC .
WASHBURN : -- - ] ~ ~ `
III Il_ , ~ JI ., :. I, II I ~ I- ~c _ If it I
VINCENT I ~ r 1 ~ ~L 1~- ~~ -II it ~ ~ II
^ ~ ~L _ 1 lr-_ ~E~ T, I,, n_. I~ Ct-_--~~- lf-= -1~ ~i I '~ :-1f
UPTON I
~ THOMAS I~I lr _ I _Ir_~rl II I~ ~~ I[~L 7L~_ _~l[ ~I ~ t ~ _ I~
m SHERIDAN ~I~ L~= I II _ 11 I ~~~(c 7C --l rC~7(1 I . I ~ r Lt~~'~
RUSSELL Ili _ F I _.JI.:. ~ ~C--~i~_~~"!I. r~ __I ~___= r _
~ QUEEN ' I ~ -.:-~[ ..__I I~_ ~~ _ IL..::. III
3 PENN AVE. IL~~ Il ___- ~~M~~t_..l _~ _ .`JI _J ~ ~1-)t _ IC__ _
= OLIVER I~~~JI r..__ 1C.. -Il_ 1C:-_.1 _ II-_. II~~~. __ _.. ~~ .__I - Il l ~..-..
__
~ NEWTON I'll i~-. _1(. .lr ] t ~ lr _ [~ ~ _.IC _ 1.- I _ ~ ___I
_
MORGAN it ][ .. I[ _.l ~ j ]_ I ..1r_. ~[~~ If I~ ( 1[ I[. 1L ~C.
~ KNDX I __~[..___ I( I k_~ fir. 1L•-1C1[_ I ~ C 1C_ lr__1[
D JAMES ~~ l ~_I ~.C_ ~r ._~r .~r I~~~_.,~L `r_- Il ~I~
__ F -
N IRVING ~_L J r -- -- I -~ 1 _f_-LA~~SN4?~` -- -~..
HUMBOLOT - E -
'~ _7C CCl r
GIRARD ._ I.=- -
D FREMONT 1I _.__ Il`~~_''I]l~ ~._~ ~~m(~. ~5W ., - ~_: L~-
EMERSON _ _- I _ JL' _IC_~_. r E ~1~ ,~~~~]T
9 -- I
~ DU PONT I( ~-_.I _. __1jL~_ C-. r -~. \ x p ~\ j~~.yy,~ _ _
III I ` \\ m o ~~ ewo~> ~~ / 1~I
l~ `.
,I- ~If-- ---~ IIII~\'xI - i
BRYANT III L_-~ __ CC. LJL- ~~ \ ~~ rra_a%~ 1
\ J '
AL ORICH I1. I~~Ci ~~CL_ C(~p~. BI,y,~\ %$~~ii~1`~ o-/
LYNDALE AVE. ,.. -- _ ]C-~I~I --JI~~ ~" l
l (r~ !-
I, IL___.__ I C`.1C_7 C 7~ 1 C` ~. (-_._~ ~r~ II n /// II
I I'I
GARFIELD N i I J ]C- ,[~C__1 ~.._-1...~ ~SII ~~-\~/~CI
HARRIET II~~I~ ~ -._ ~~~
-._
GRAND I ~~.._ ~ ~ I ~~.~1~- 7~~r~ ~i l,. L ~I - C ~C~~I I.. ~ ~LJ~.1
PLEASANT It~ I ` .1--. ] L V']C.7I_: _._._--'1lI~L.__- If ~L=-_-1I-_. I_ -_. _~C
PtusauRr '~ ( _i-_ ~~1^ _I~r~~J r r ~I~_. ; ~ `= r
WENTWORTH 11~1~ JI iL~C__~l ::. I <=P-- [ IL_.. ll- I 1 JL~
~ 1~1 - ~C 1C _1[- 1 ~ _ r ~'~ I' ~~C--1
RL AISOELL I`I I - "-~ _-]~~C ~- ][ - IL ~ 7 I l ~~ _J
NICOL LET 4VE { ~ II _ 'lC~~]C -.I [.... - ~_--_ I- Ir:. [___~ ..I I_.
IC --1 7C_JC- I~ •-;F -~C7L ~. ~i` 7 I ___, 1C ;C_~
STEVENS li I] -_ _ C-7f 71-I~ ~~ ~~I • -. ~C
__.~000~IC~ ._.__- [. _
m 200 ~ ` ---; ll_-1C1~-1C~C~C_-!: iC ---I[ C lC~
_ _, _
m OLIN 70N '1 ~I. t' ~~ ~C]CC. I~_~L~L j11~._.C _ r,it ~~ Il.~[
i 4tH ''. _ I~ i CC~ 1[-_ ~C :~[: _-CJI-J[ ~?~ % C
..... , _ - r-- I a.. ~
y sln 'I;t 1 '~ 1~ _ ~ r~_7 r~,T7[ X1(1 1[~.~I _. 1[ t_ r
~_ PORTLAND AVE. la ~.L! t. __ I .Ir. ~C-1C`-._NJ_ II ~_lt -_i' - I~.Gi -. l_.. .. ~I _
n OAKLAND ~~Ill r _- I - _ _
~--
iL-l¢ _
~I, Ir _Ir ~[__ 1[ - 7r 1[ 1[ .Im 1k~-1f _ I ]
N PARK ,~~I (~ ll._
D COLU M9US r. _ - Ir --. [ ~r _ L I Il -- I[ ..II,A,' ,I~l
III [ _..:1[ ][~__ ir__._. r 1C l~ . ,I I(D ,aCIC _ >
CHICAGO I'iIL I
z ELLIDT I;I[ l --1~ -1[ I[ -_ [ I[ lr _l~ _'~~ '~- lC m z
m II to I~y ir_-,~C-1[_ ~[-- [- . IC l~ .'; l 'n~ 7C = \
12tH (~t iC ___l~ 1r IC_-_ It_: 1f- l l ~s, Ir _'i_ -1C-:1C _I : , I
131n ~,I, ~r._._7[ _-.1C. ~~:.. .... I[ ~[ _i[ ~:-I(-- 1[ ~-.11 91[i. 11 _.l(
14tH ~ 11_ l-_ 11 l[ . I[ .]`.
19 to ~, , IC _.._~[ _I[ I( _ . ~. Il ~. IC.. -. ~[ -1[ _ 11 I~ "I a.j~
BLOOMING TON - - -~ -- I I ~ '-""' I f - - ( I •
IGtn ~„ ~ -~ ~ ,r I_._.__7r.:__IL _`<',I[ 1' - -1[ __l[ 1f, 1[ 1f--
1,tn ~ , --
I -I
CEDAR 1AVE ~~ `-" I __~ ~. I :. it _ I( -`` I~._ I~ _ 11 _ I I II _~[ r
LOHGFE LLOW - _ - ~._-. -~ -j-~-..- ~I I. TH -7T__
_ jl_: I I~(Il ~L . ~U
m o '_.
RZZ1 Tt 1 N N y NNI -i Ni -1 I. ~_-I
Z=i II 11 ii __'
~j ~ .~ a I I I__ lr ;r
Z m T I
8 30 ~ I' ( N
Z ~
a
0
N
N
ti
O
G N =
o =
~ yF
--- h,l XERXES AVE.
-~- I~Ii WASHBURN
III; VINCENT
---- I UPTON
-- ~ I THOMAS
-~~--=j~l SHERIDAN
"~_- ~I ~I RUSSELL
(II
(III QUEEN
-~„I~ PENN AVE.
~~ I ~II OLIVER
-~ --~- NEWTON
]C MORGAN
~r --~- I LOGAN
KNOX
~~ „ { JAMES
~~' ~ IRVING
HUMBOLDT
~`-' ~ II GIRARD
~~nl I.
--r--- FREMONT
~ I EMERSON
t~, II OUPONT m
C ~ /~~
~~~ I ~~ COLFAX
ill II\'II BRYANT Z
~~ II ALDRICH v
I III
I ~, LYNDALE AVE. RI
[_~~II GARFIELD ~ Q
~I~illl
~~I I ~ GRAND T
I
r ~k'~ PLEASANT
III-~II III PILLSBURY L~ O~
" I I ~ WENTWORTH ~ m
II BLAISOELL O ~
"1~ NICOLLET AVE. ~ n
~, I ~, D D
STEVENS
~~ 2nd fn
~~-,,i~ 3rd m
-" ~ 1II~ CLINTON
' li 41n N
._. .I:; Sth m
j-:r- Ii.I PORTLAND 4VE.
t~~.l OAKLAND
I PARK
;' COLUMBUS
CHICAGO
]', ELLIOT
I to to
~;
:~ II to
' 111 Izrn
~C-..1 13 th
~I-- latn
J[ _._~_ 15 to
n -
f BLOOMINGTON
J....-`~ 16 to
> ITtn
18 to
-~_ ~ CEDAR AVE.
1 -I LONGFEL LOW
19 to
20tH
I 21 St
22nd
- STANDISM
23 rd
m m
o
~ ~
•
APPENDIX B
PROPERTY LOCATED IN
TAX INCREMENT FINANCING DISTRICT "A-1"
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
26-028-24-13-0046 6425 - 15th Ave. So. $ 1,347
26-028-24-13-0047 6415 - 15th Ave. So. $ 520
26-028-24-13-0049.. 6407 - 15th Ave. So. $ 541
26-028-24-13-0051 6400 - 15th Ave. So. $ 513
26-D28-24-13-0079 6518 - 15th Ave. So. $ 1,362
26-028-24-13-0102 6538 Bloomington Ave. So. $ 501
26-028-24-13-0115 6501 - 15th Ave. So. $ 444
26-028-24-14-0096 6401 Bloomington Ave. So. $ 466
26-028-24-14-0116 6507 Bloomington Ave. So. $ 541
27-028-24-42-0068 6612 - 2nd Ave. So. $ 519
33-028-24-42-0014 7435 Emerson Ave. So. $ 469
34-028-24-11-0079 7039 - 5th Ave. So. $ 528
34-028-24-12-0085 7129 - 1st Ave. So. $ 1,602
34-028-24-13-0094 7216 - 1st Ave. So. $ 1,584
34-028-24-14-0041 7320 - 5th Ave. So. ~ 1,671
Total $ 17,730
*Original Net Tax Capacity for taxes. payable in 1990.
-27-
APPENDIX C
ESTIMATE OF TAX. INCREMENTS
FOR
TAX INCREMENT FINANCING DISTRICT "A-1"
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 lA; Prop. Type R-Hmstd)
....... RANGE .......
Per Home Per Home
$110,000 $140,000
92.00 92.00$
--------- ---------
$101,200 5128,800
$101,200
1.OOg $68,000 $ 680
2.00$ $32,000 640
3.00$ Balance 36
New Tax Capacity $ 1,356
- Original Net Tax Capacity (Avg.) (507)
Captured Net Tax Capacity. $ 849
x Tax Capacity Rate (1990) 102.964$
Annual Tax Increment $ 874
x 19 Homes $ 16,609
C. ESTIMATE OF NET AD VALOREM PROPERTY TAXES
Estimated Market Value $ 101,200
x Tax Capacity Ratio
(Class lA; Prop. Type R-Hmstd)
1.00$ $68,000 $ 680
2.00$ $32,000 $ 640
3.00$ Balance $ 36
New Tax Capacity $ 1,356
x Tax Capacity Rate 102.964$
Net Ad Valorem Taxes (per home) $ 1,396
x 19 Homes $ 26,528
$128,800
$ 680
640
864
$ 2,184
----(507)
$ 1, 677
102.964$
$ 1,727
$ 32,807
$128,800
$ 680
$ -640
$ 864
$ 2,184
102.964$
$ 2,249
$ 42,726
•
•
•
-28-
APPENDIX D
BUDGET
TAX INCREMENT FINANCING DISTRICT "A-1"
Property Acquisition (Incl. Appraisals) $ 1,009,393
Demolition/Site Clearance $ 114,950
Legal Expenses $ 16,326
TOTAL GROSS EXPENDITURE $ 1,140,669
•
•
-29-
APPENDIX E
ESTIMATE OF IMPACTS ON OTHER
TAXING JURISDICTIONS
TAX INCREMENT FINANCING DISTRICT "A-1"
The impact of the use of tax increment tax dollars for
project costs is estimated in Table I for each taxing
jurisdiction. This estimate is based on development activities
discussed in this plan. The figures do not include possible tax
increments derived from changes in tax capacity rates, tax
capacity ratios, or inflation factors.
TABLE I
TIF DIST. TIF DIST.
MOST RECENT ORIGINAL WITHIN
TAX CAPACITY NET TAX TAXING
(TAXES 1990) CAPACITY JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,421,750 $ 17,730 0.0757$
Hennepin County 1,034,463,652 17,730 0.0017$
School Distr. #280 33,115,397 17,730 0.0535$
Vo-Tech. School 661,852,490 17,730 0.0027$
Water Shed #3 .270,526,740 17,730 0.0066$
Miscellaneous:
Met Council* $1,034,298,323 $ 17,730 0.0017$
Regional Transit Bd. 1,034,298,323 17,730 0.0017$
Mosquito Control 1,011,958,476 17,730 0.0018$
Hennepin Parks 704,425,509 17,730 O.D025$
Regional Railroad 1,034,463,652 17,730 0.0017$
Park Museum 1,034,463,652 17,730 0.0017$
*Portion within Hennepin County only.
Considering all of the taxing jurisdictions, it can be seen
from Table I above that the city, school, and county districts
will retain 99$ of each respective district available for normal
growth of tax base or valuation.
Applying the percentage of the total tax capacity rate
(taxes payable in 1990) levied by each taxing jurisdiction to the
projected captured tax capacity resulting from the new program
-30-
reveals the annual use of tax dollars for project costs as it
• affects each taxing. jurisdiction., Based on the analysis in
Appendix C, Estimate of Tax Increment, Table II represents the
amount of increment which is attributed to each taxing body.
TABLE II
..............RANGE MINIMUM...............
$ TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ $ 3,316
Hennepin County 27.916 27.1 4,503
School Distr. #280 47.638 46.2 7,685
Vo-Tech. School 1.103 1.1 178
Water Shed #3 0.120 0.1 19
Miscellaneous** 5.631 5.5 908
• Total 102.964$ 100.0$ $16,609
..............RANGE MAXIMUM............---
$ TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ $ 6,550
Hennepin County 27.916 27.1 8,895
School Distr. #280 47.638 46.2 15,179
Vo-Tech. School 1.103 1.1 351
Water Shed #3 0.120 0.1 38
Miscellaneous** 5.631 5.5 1,794
Total 102.964$ 100.0$ $32,807
The tax increments derived from prospective development in.
the tax increment district would not be available to any of the
taxing jurisdictions were it not for public intervention by the
HRA. The increase in tax capacity value due to development will
be delayed for application to the tax capacity rate levy for the
duration of the tax increment district. This new tax capacity
value could eventually permit a levy decrease. If it could be
• assumed that the captured tax capacity was available for each
taxing jurisdiction, the use of tax dollars for project costs
-31-
represented as tax increments may be determined. This
determination is facilitated by estimating how much the levy for
property outside of the tax increment district would have to be
adjusted to compensate for the temporary use of new development
tax dollars in each taxing jurisdiction.
Table III represents the additional tax capacity rate that
would be required to be levied by each taxing jurisdiction to
compensate for the use of the project's tax increment tax dollars
for project costs.
TABLE III
.........:.. .MINIMUM IMPACT..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,404,020 0.142 $ 3,316
.Hennepin County 1,034,445,922 0.004 4,503 •
School Distr. #280 33,097,667 0.232 7,685
Vo-Tech. School 661,834,760 0.000 178
Water Shed #3 270,509,010 0.000 19
Miscellaneous** 1,034,445,922 0.001 908
..............MAXIMUM IMPACT..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,404,020 0.280 $ 6,550
Hennepin County 1,034,445,922 0.009 8,895
School Distr. #280 33,097,667. 0.459 15,179
Vo-Tech. School 661,834,760 0.001 351
Water Shed #3 270,509,010 0.000 38
Miscellaneous** 1,034,445,922 0.002 1,794
*Tax increment district tax capacity value subtracted from
taxing jurisdiction tax capacity.
**Miscellaneous value based on Hennepin County tax capacity.
•
-32-
•
The Housing and Redevelopment Authority
in and for
The City of Richfield, Minnesota
Redevelopment Plan
for
Redevelopment Project Area "B"
and
Tax /ncrement Financing Plan
for
Tax Increment Redevelopment District "B-1 "
of the
Expanded New Home -Scattered Site
Housing Program
Dated: July 16, 1990
•
TABLE OF CONTENTS
Part 1.
Redevelopment Plan
for
Redevelopment Project Area "B"
PAGE
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
F. Proposed Land Use 38
G. Acquisition and Relocation Activities 38
H. Environmental Considerations 39
I. Redevelopment Plan Modification. 39
J. Administration of Redevelopment Project 39
Part ll.
Tax Increment Financing Plan
for
Tax Increment Redevelopment District "B-1 "
A. Statutory Authority 41
B. Statement of Objectives 41
C. Development Program 41
D. Description of Property in the
Tax Increment Financing District 42
E. Classification of the Tax Increment
Financing District 42
F. Parcels In Acquisition 44
G. Estimate of Costs 44
H. Estimated Amount of Obligated Funds. 44
(iii)
I. Sources of Revenue 44
J. Original Tax Capacity 45
K. Estimated Captured Tax Capacity 45
L. Duration of the District 45
M. Estimated Impact on Other Taxing Jurisdictions. 45
N. Modifications of the Tax Increment
Financing District 46
O. Limitation on Administrative Expenses 46
P. Limitation on Duration of Tax Increment
Financing Districts 46
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: Map: Redevelopment Project Area "B". 57
Appendix B: Property in the Tax Increment
Redevelopment District "8-1" 59
Appendix C: Estimate of Tax Increments . 60
Appendix D: Tax Increment Financing Budget. 61
Appendix E: Estimate of Impacts on Other
Taxing Jurisdictions 62
(iv)
Part 1.
Redevelopment Plan
' for
Redevelopment Project Area "B"
A. Statement of Public Purpose
It is found that there is not in this city a sufficient
supply of adequate safe and sanitary dwelling accommodations;
that in certain areas thereof there exist substandard conditions,
unsafe and unsanitary housing and buildings and structures used
or intended to be used for living; which by reason of
sociological and technological changes, dilapidation,
obsolescence, overcrowding, and faulty arrangement or design of
building and improvements, lack of public facilities,
ventilation, light and sanitary facilities, or deleterious land
use, or obsolete layout, or any combination of these and other
factors are injurious to the health, safety, morals and welfare
of the citizens of this state; cause an increase and spread of
crime, juvenile delinquency and disease, inflict blight upon the
economic value of large areas; threaten the source of public
revenues while decentralizing communities to areas improperly
planned and not related to public facilities; and require many
citizens to occupy unsafe, unsanitary and overcrowded dwellings.
Therefore, in order to respond to public interest and protect
. the overall economic stability of the housing area, redevlopment
of neighborhoods is required to create an economic environment
which fosters the growth of a healthy residential base and
encourages private enterprise to engage in redevelopment and new
construction to be implemented in accordance with a comprehensive
community plan. The Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota (HRA) and the City Council
of the City of Richfield, Minnesota (City) have determined that
public intervention is necessary in Redevelopment Project Area
"A" (Project Area "B") of the Expanded New Home - Scattered Site
Housing Program (Housing Program) in order to achieve goals and
objectives for the area.
B. Statutory Authority
The statutory authority for the undertaking of a
redevelopment project in Project Area "B" and the activities
proposed in the redevelopment plan relating thereto is conferred
upon the HRA pursuant to and in accordance with the Housing and
Redevelopment Authorities Act, Minn. Stat., Sec. 469.001 to
469.047, inclusive, as amended. Specifically, Minn. Stat., Sec.
469.027 establishes the requirements for redevelopment plan
preparation by an HRA prior to undertaking property acquisition,
redevelopment, development and other related improvements.
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C. Description of the Redevelopment Project Area •
In order to guide development and redevelopment in Project
Area "B", the HRA has created this redevelopment plan. Pursuant
to Minn. Stat., Sec. 469.002, subd. 12, the proposed project
meets the definition of a redevelopment project, defined in Minn.
Stat., Sec. 469.002, subd. 14, and will henceforth, be referred
to as the redevelopment project. The boundary for Project Area
"B" encompasses all that real property within an area described
as follows:
Beginning at the intersection of the southerly right-of-way
line of State Highway, No. 62 and the easterly right-of-way
line of Oliver Avenue South, thence in a line easterly more
or less, along said southerly right-of-way line to its
intersection with the westerly right-of-way line of Lyndale
Avenue South. Thence, southerly along said westerly right-
of-way line to its intersection with the southerly right-
of-way line of West 63rd Street. Thence, westerly along
said southerly right-of-way line to its intersection with
the westerly right-of-way line of Aldrich Avenue South.
Thence, southerly along said westerly right-of-way line to
it intersection with the southerly property line of Lot 4,
Block, 2, Ray's Lynnhurst Second Addition. Thence,
westerly along said southerly property line, as extended to
its intersection with the easterly property line of Lot 9, •
Block 2, Ray's Lynnhurst Second Addition. Thence,
southerly along said easterly property line, as extended,
to its intersection with the southerly property line of Lot
5, Block 2, Ray's Lynnhurst Second Addition. Thence,
westerly along said southerly property line, as extended,
to its intersection with the southerly right-of-way line of
Mildred Drive. Thence, westerly more or less, along said
southerly right-of-way line to its intersection with the
easterly right-of-way line of Emerson Avenue South.
Thence, southerly along said easterly right-of-way line to
its intersection with the northerly property line of Lot A,
Silverwood Second Addition. Thence, easterly along said
northerly property line, as extended, to its intersection
with the easterly property line of Lot A, Silverwood Second
Addition. Thence, southerly along said easterly property
line, as extended, to its intersection with the southerly
right-of-way. line of West 66th Street.. Thence, westerly
along said southerly right-of-way line to its intersection
with the westerly right-of-way line of Humboldt Avenue
South. Thence, southerly along said westerly right-of-way
line to its intersection with the northerly right-of-way
line of West 69th Street. Thence, westerly along said
northerly right-of-way line to its intersection with the
westerly right-of-way line of Irving Avenue South. Thence,
southerly along said westerly right-of-way line to its
intersection with the southerly right-of-way line of West
72nd Street. Thence, easterly along said southerly right-
of-way line to its intersection with the westerly right-of-
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way line of Humboldt Avenue South. Thence, southerly along
said westerly right-of-way-line to its intersection with
the northerly right-of-way line of West 73rd Street.
Thence, westerly along said northerly right-of-way line to
its intersection with the westerly right-of-way line of
Penn Avenue South. Thence, southerly along said westerly
right-of-way line to its intersection with the northerly
right-of-way line of West 74th Street. Thence, westerly
along said northerly right-of-way line to its intersection
with the westerly right-of-way line of Sheridan Avenue
South. Thence, southerly along said westerly right-of-way
line to its intersection with the northerly right-of-way
line of West 76th Street. Thence, westerly along said
northerly right-of-way line to its intersection with the
easterly right-of-way line of Xerxes Avenue South. Thence,
northerly along said easterly right-of-way line to its
intersection with the southerly right-of-way line of West
66th Street. Thence, easterly along said southerly right-
of-way line to its intersection with the easterly right-of-
way line of Russell Avenue South. Thence, southerly along
said easterly right-of-way line to its intersection with
the northerly property line of Lot 23, Block 2, Tingdale
Brothers Lincoln Hills. Thence, easterly along said
northerly property line, as extended, to its intersection
with the easterly property line of Lot 23, Block 2,
Tingdale Brothers Lincoln Hills. Thence, southerly along
said easterly property line, as extended, to it
intersection with the southerly right-of-way line of West
67th Street. Thence, easterly along said southerly right-
of-way line to its intersection with the easterly property
line of Lot 24, Block 16, Tingdale Brothers Lincoln Hills.
Thence, southerly along said easterly property line, as
extended, to its intersection with the northerly right-of-
way line of West 69th Street. Thence, easterly along said
northerly right-of-way line to its intersection with the
easterly right-of-way line of Penn Avenue South. Thence,
northerly along said easterly right-of-way line to its
intersection with the southerly right-of-way line of West
68th Street. Thence, easterly along said southerly right-
of-way line to its intersection with the easterly right-of-
way line of Oliver Avenue South. Thence, northerly more of
less, along said easterly right-of-way line, as extended,
to the point of beginning.
(Also refer to Appendix A, Map: Project Area "B"
D. Statement of Goals and Objectives
The HRA determines that it is necessary, desirable, and in
the public interest to undertake a redevelopment project in the
City pursuant to the provisions of Minn. Stat., Chapter 469, as
amended. The HRA determines that the funding of the necessary
activities and improvements in the redevelopment project area
shall be accomplished through the use of tax increment financing
and other revenue sources available to the HRA and City.
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The following goals and objectives are intended to serve as a
basis for guiding activities in the redevelopment project area:
1. To develop strategies to encourage development and
redevelopment of single family homes.
2. To maintain a positive environment within the residential
community.
3. To enrich the quality of life for residents through
planning.
4. To recognize the needs of all segments of the populace
through diversity in housing stock which is a major
determinant of the living environment.
5. To achieve a high level of design quality to enhance the
physical environment.
6. To achieve a balanced variety of housing stock
appropriate to the market area.
7. To enhance the residential tax base of the community.
8. To protect the surrounding residences from the adverse
effects of dilapidation and deterioration.
9. To eliminate unsightly, blighting, deteriorated, and
substandard structures.
10. To provide an expanded range of housing opportunities of
sufficient quality and size through development,
redevelopment and new consttruction.
11. To provide maximum opportunity, consistent with the needs
of the city for development by private enterprise.
12. To coordinate elements of the City's Comprehensive Plan
with these project objectives.
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 secx. The following activities are appropriate for
the area.
Description of Anticinated__Public Development Activities
The anticipated public development activities in the
redevelopment project area to be undertaken by the HRA and City
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in order to support the private development activities include:
1. Property acquisition;
2. On-site clearance;
3. On-site improvements;
4. Remedial site environmental activities; and
5. 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.
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 the developer. The general
requirements to be imposed upon the developer 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.
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F. Proposed Land Use
The current land uses in the redevelopment project area
include the following:
- Single family residential;
- Apartment;
- Duplex;
- Commercial;
- Parks;
- Vacant; and
- Quasi-public (e.g. churches, cemetery, nursing homes,
private schools, and service organizations).
New uses will be restricted to single family residential.
G. Acquisition and Relocation Activities
1. Acquisition
As a means of comprehensively formulating an expanded New
Home Program, HRA staff recently undertook the following
tasks to identify property for acquisition:
a. Analysis of residential property tax records with
estimated property values less than or equal to
$55,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
The following property has been identified for
acquisition for Cycle I of the program:
PID NUMBER
28-028-24-11-0041
28-028-24-11-0067
28-028-24-12-0046
28-028-24-22-0079
28-028-24-24-0046
28-028-24-34-0052
ADDRESS
6300 Aldrich Ave. So.
6315 Dupont Ave. So.
6321 Humboldt Ave. So.
6313 Morgan Ave. So.
6424 James Ave. So.
6813 Logan Ave. So.
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L'
•
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33-028-24-21-0078 7145 James Ave. So.
33-028-24-24-0071 7210 James Ave. So.
2. Relocation
The HRA accepts as binding its obligations under
provisions of federal and state law (Minn. Stat., Sec. 117.50
through 117.56) for relocation.
H. Environmental Considerations
Generally, the redevelopment project area is developed. All
proposed public and private development resulting from this plan
will be evaluated against existing environmental regulations.
I. Redevelopment Plan Modification
All redevelopment plan modifications will be processed in
accordance with Minn. Stat., Sec. 469.029, subd. 6.
J. Administration of Redevelopment Project
The redevelopment project and related housing program will be
administered by the Richfield Housing and Redevelopment
Authority.
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(Intentionally Left Blank)
•
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Part II.
Tax Increment Financing Plan
for
Tax Increment Redevelopment District "B-1"
A. Statutory Authority
The statutory authority for the undertaking of a tax
increment financing district (TIF District "B-1") in
Redevelopment Project Area "B" (Project Area "B") for 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.
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 an expanded New Home
Program. In order to gauge interest in the new program and
initially identify residential property for program
participation, the following tasks were undertaken:
a. Analysis of residential property tax records with
estimated property values less than or equal to
$55,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
A comprehensive, integrated approach for acquisition,
site clearance, and new construction has been formulated and
will be provided through program guidelines. The HRA will
assist prospective developers with development,
redevelopment, new construction, and other related activities
within the context of this Plan, the Redevelopment Plan and
other related guidelines.
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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 will be required to
be submitted to the HRA as part of the review process. The
following activities may be expected to occur:
1. Property Acquisition;
2. On-site clearance;
3. On-site improvements;
4. New construction;
5. Remedial site environmental activities; and
6. Adjacent public improvements and utilities which
service site.
For Cycle I of the Housing Program, a total of 27
properties have been identified for program participation and
acquisition. Nineteen of the properties are located within
Redevelopment Project Area "A" while the remaining eight are
within Redevelopment Project Area "B". (Refer to Appendix A
for map of Redevelopment Project Areas.) Redevelopment
Project Area B contains two properties with double lots. With
property subdivisions, two additional homes will be
constructed. Initial construction for Cycle I is anticipated
to begin toward the end of the last quarter of calendar year
1990, with construction for each home to run 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-1" 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
the district to be established within Project Area "B" is a
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redevelopment tax increment financing district as defined in
Minn. Stat., Sec. 469.174, subd. 10:
It has been ascertained 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.
""Structurally substandard" shall mean containing
defects in structural elements or a combination of
deficiencies in essential utilities and facilities,
light and ventilation, fire protection including
adequate egress, layout and condition of interior
partitions, or similar factors, which defects or
deficiencies are of sufficient total significance to
justify substantial renovation or clearance."
"A building is not structurally substandard if it is in
compliance with the building code applicable to new
buildings or could be modified to satisfy the building
code at a cost of less than 15 percent of the cost of
constructing a new structure of the same square footage
and type on the site. The municipality may find that a
building is not disqualified as structurally
substandard under the preceding sentence on the basis
of reasonably available evidence, such as the size,
type, and age of the building, the average cost of
plumbing, electrical, or structural repairs, or other
similar reliable evidence. If the evidence supports a
reasonable .conclusion that the building is not
disqualified as structurally substandard, the
municipality may make such a determination without an
interior inspection or an independent expert appraisal
of the cast of repair and rehabilitation of the
building."
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 "Expanded New Home - Scattered Site
Housing Program: Blight Qualification Survey" which will be on
file at City Hall for the duration of the tax increment
district's life.
•
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F. Parcels in Acquisition
The following property has been identified for acquisition:.
PIN NUMBER ADDRESS
28-028-24-i1-0041 6300 Aldrich Ave. So.
28-028-24-11-0067 6315 Dupont Ave. So.
28-028-24-12-0046 6321 Humboldt Ave. So.
28-028-24-22-0079 6313 Morgan Ave. So.
28-028-24-24-0046 6424 James Ave. So.
28-028-24-34-0052 6813 Logan Ave. So.
33-028-24-21-0078 7145 James Ave. So.
33-028-24-24-0071 7210 James Ave. So.
The tax increment district budget includes acquisition costs
for subsidy purposes which will be offered to developers 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, approximately $1 million is available to
implement this program. Repayment of these funds will be through
the use of tax increment financing and other sources of revenue
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.
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.
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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-1" is based on the January 2, 1990 assessed value
placed on the property by the county assessor. The OTC for the
district is $6,415. (See Appendix B, Property Located in Tax
Increment Financing District "B-1".) 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
$931 to $1,759 per home. The total CTC for ten new homes within
the project area ranges from $9,310 to $17,590. As a result of
the improvements to be constructed, it is expected that the
estimated captured net tax capacity will be available for the
housing program. It is also anticipated that this amount will be
captured not more than 25 years. (See Appendix C, Estimate of
Tax Increments).
L. Duration of the District
Pursuant to Minn. Stat., Sect. 469.176, subd. 1, the maximum
duration of a redevelopment tax increment district is 25 years.
The HRA elects to capture 100$ 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.
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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, 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
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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."
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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.
-47-
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 air 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 land,
site preparation, soils correction, removal of hazardous waster
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,
-48-
• 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.
-49-
(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 the developer 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.
-50-
• 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
-51-
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 "Expanded New Home - Scattered Site
Housing Program: Blight Qualification Survey"
which will be on file at City Hall 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
prospective developers could not construct the
aforementioned improvements; and without the use of
tax increments or other revenues authorized by this
plan to with the financing of the activities,
prospective developers 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 an expanded New Home
Program for the development, redevelopment, new
construction and other related improvements of
residential homes for which there is limited
sources of revenue available. .
-52-
• 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.
•
-53-
(Intentionally Left Blank)
n
1~
•
-54-
•
APPENDICES
EXPANDED NEW HOME -SCATTERED SITE
HOUSING PROGRAM
REDEVELOPMENT PROJECT AREA "B"
AND
TAX INCREMENT FINANCING DISTRICT "B-1 "
•
-55-
(Intentionally Left Blank)
•
•
-56-
APPENDIX A
MAP
n
•
REDEVELOPMENT PROJECT AREA "B"
-57-
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APPENDIX B
PROPERTY LOCATED IN
TAX INCREMENT FINANCING DISTRICT "B-1"
ORI GINAL NET
PIN NUMBER ADDRESS TAX CAPACITY*
28-028-24-11-0041 6300 Aldrich Ave. So. $ -518
28-028-24-11-0067 6315 Dupont Ave. So. $ 511
28-028-24-12-0046 6321 Humboldt Ave. So. $ 1,443
28-028-24-22-0079 6313 Morgan Ave. So. S 459
28-028-24-24-0046 6424 James Ave. So. $ 524
28-028-24-34-0052 6813 Logan Ave. So. $ 666
33-028-24-21-0078 7145 James Ave. So. $ 1,800
33-028-24-24-0071 7210 James Ave. So. S 494
Total $ 6,415
*Original Net Tax Capacity for taxes payable in 1990.
•
-59-
APPENDIX C
ESTIMATE OF TAX INCREMENTS
FOR
TAX INCREMENT FINANCING DISTRICT "B-1"
....... RANGE .......
A. VALUE OF NEW CONSTRUCTION Per Home Per Home
Construction Cost (Land & Bldg) $110,000 $140,000
x Sales Ratio 92.00$ 92.00$
--------- ---------
Estimated Market Value $101,200 $128,800
B. TAX INCREMENT VALUE
Estimated Market Value ~ $101,200
x Tax Capacity Ratio
(Class lA; Prop. Type R-Hmstd)
1.00$ $68,000 $ 680
2.00$ $32,000 640
3.00$ Balance 36
New Tax Capacity $ 1,356
- Original Net Tax Capacity (Avg.) (425)
-
Captured Net Tax Capacity -
$ ---
931
x Tax Capacity Rate (1990) 102.964$
Annual Tax Increment $ 959
x 10 Homes $ 9,586
C. ESTIMATE OF NET AD VALOREM PROPERTY TAXES
Estimated Market Value $ 101,200
x Tax Capacity Ratio
(Class lA; Prop. Type R-Hmstd)
1.00$ $68,000 $ 680
2.00$ $32,000 $ 640
3.00$ Balance $ 36
New Tax Capacity $ 1,356
x Tax Capacity Rate 102.964$
Net Ad Valorem Taxes (per home) $ 1,396
x l0 Homes $ 13,960
$128,800
$ 6.80
640
864
$ 2,184
-----(425)
$ 1,759
102.964$
$ 1,811
$ 18,111
$128,800
$ 680
$ 640
$ 864
$ 2,184
102.964$
$ 2,249
$ 22,490
•
•
•
-60-
APPENDIX D
BUDGET
TAX INCREMENT FINANCING DISTRICT "B-1"
Property Acquisition (Incl. Appraisals) $ 425,007
Demolition/Site Clearance $ 48,400
Legal Expenses $ 6,874
TOTAL GROSS EXPENDITURE $ 480,281
r~
C~
-61-
APPENDIX E
ESTIMATE OF IMPACTS ON OTHER
TAXING JURISDICTIONS
TAX INCREMENT FINANCING DISTRICT "B-1"
The impact of the use of tax increment tax dollars for
project costs is estimated in Table I for each taxing
jurisdiction. This estimate is based on development activities
discussed in this plan. The figures do not include possible tax
increments derived from changes in tax capacity rates, tax
capacity ratios, or inflation factors.
TABLE I
TIF DIST. TIF DIST.
MOST RECENT ORIGINAL WITHIN
TAX. CAPACITY NET TAX TAXING
(TAXES 1990) CAPACITY JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,421,750 $ 6,415 0.0274$
Hennepin County 1,034,463,652 6,415 0.0006$
School Distr. #280 33,115,397 6,415 0.0194$
Vo-Tech. School 661,852,490 6,415 0.0010$
Water Shed #3 270,526,740 6,415 0.0024$
Miscellaneous:
Met Council* $1,034,298,323 $ 6,415 0.0006$
Regional Transit Bd. 1,034,298,323 6,415 0.0006$
Mosquito Control 1,011,958,476 6,415 0.0006$
Hennepin Parks 704,425,509 6,415 0.0009$
Regional Railroad 1,034,463,652 6,415 0.0006$
Park Museum 1,034,463,652 6,415 0.0006$
*Portion within Hennepin County only.
Considering all of the taxing jurisdictions, it can be seen
from Table I above that the city, school, and county districts
will retain 99$ of each respective district available for normal
growth of tax base or valuation.
Applying the percentage of the total tax capacity rate
(taxes payable in 1990) levied by each taxing jurisdiction to the
projected captured tax capacity resulting from the new program
-62-
•
reveals the annual use of tax dollars for project costs as it
affects each taxing jurisdiction. Based on the analysis in
Appendix C, Estimate of Tax Increment, Table II represents the
amount of increment which is attributed to each taxing body.
TABLE II
..............RANGE MINIMUM...............
$ TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
•
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ $ 1,914
Hennepin County 27.916 27.1 2,599
School Distr. #280 47.638 46.2 4,435
Vo-Tech. School 1.103 1.1 103
Water Shed #3 0.120 0.1 11
Miscellaneous** 5.631 5.5 524
Total 102.964$ 100.0$ $ 9,586
..............RANGE MAXIMUM...............
$ TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
•
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ $ 3,616
Hennepin County 27.916 27.1 4,910
School Distr. #280 47.638 46.2 8,380
Vo-Tech. School 1.103 1.1 194
Water Shed #3 0.120 0.1 21
Miscellaneous** 5.631 5.5 990
Total 102.964$ 100.0$ $18,111
The tax increments derived from prospective development in
the tax increment district would not be available to any of the
taxing jurisdictions were it not for public intervention by the
HRA. The increase in tax capacity value due to development will
be delayed for application to the tax capacity rate levy for the
duration of the tax increment district. This new tax capacity
value could eventually permit a levy decrease. If it could be
assumed that the captured tax capacity was available for each
taxing jurisdiction, the use of tax dollars for project costs
-63-
represented as tax increments may be determined. This
determination is facilitated by estimating how much the levy for
property outside of the tax increment district would have to be
adjusted to compensate for the temporary use of new development
tax dollars in each taxing jurisdiction.
Table III represents the additional tax capacity rate that
would be required to be levied by each taxing jurisdiction to
compensate for the use of the project's tax increment tax dollars
for project costs.
TABLE III
...............MINIMUM IMPACT ..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,415,335 0.082 $ 1,914
Hennepin County 1,034,457,237 0.003 2,599
School Distr.. #280 33,.108,982 0.134 4,435
Vo-Tech. School 661,846,075. 0.000 103
Water Shed #3 270,520,325 0.000 11
Miscellaneous** 1,034,457,237 0.001 524
..............MAXIMUM IMPACT..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,415,335 0.154 $ 3,616
Hennepin County 1,034,457,237 0.005 4,910
School Distr. #280 33,108,982 0.253 8,380
Vo-Tech. School 661,846,075 0.000 194
Water Shed #3 270,520,325 0.000 21
Miscellaneous** 1,034,457,237 0.001 990
*Tax increment district tax capacity value subtracted from
taxing jurisdiction tax capacity.
**Miscellaneous value based on Hennepin County tax capacity.
•
-64-
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 20
Agenda July 16, 1990
Issue Statement•
Authorization to solicit bids for demolition of structures
purchased through .the Expanded New Home Program (ENHP).
Background•
With the approval of the ENHP by the HRA and City Council, staff
will initiate negotiations to purchase substandard property from
.owners and initiate negotiations with developers to purchase that
same property from the HRA. (Each. of these transactions will
require specific authorization by the HRA before being
consummated.) After sale of the property to a developer, the HRA
will be responsible for demolition of structures.. The developer
will be required to grant the HRA a license to enter the property
to undertake the demolition.
It is anticipated that approximately seven substandard properties
could be purchased by mid-September. The acquisition of an
additional 14 to 20 properties would follow shortly thereafter,
through December, 1990.
Initiating a bidding solicitation process at this time would
allow sufficient time to identify a demolition contractor for
properties to be purchased by mid-September. In addition, a
demolition contractor would also be identified for the
anticipated acquisitions required through December, 1990.
Demolition contracts will be made contingent upon HRA acquisition
of property. The bid documents would also reserve to the HRA,
the right to reject any and all bids.
Recommended Motion:
Authorize staff to initiate a formal bidding process for the
demolition of structures purchased through the Expanded New Home
Program.
Basis of Recommendation:
1. A formal bidding process is required as it is anticipated
that demolition work for several properties will exceed
a total of $15,000.
2. Formal bidding must be initiated in late July to ensure
timely demolition and facilitate new construction by year
end.
3. No demolition will occur if properties are not acquired
by the HRA.
4. Homeowners are being notified that this bidding activity is
occurring and that it does not mean the removal or threat of
removal of their residence without a sale being completed.
Discussion/Decision Mode:
Formal bidding for demolition must be initiated in July to meet
program construction goals in 1990. Bid award by the HRA is
tentatively scheduled to occur at a special HRA meeting,
September 10, 1990. Sy scheduling a special meeting, staff is
attempting to assure that demolition can be initiated in
September.
Res ect ully ubmi ed,
Stev Devich
Acting Executive Director
SLD:ds
•
RESOLUTION NO.
RESOLUTION RELATING TO INITIATING
FORMAL BIDDING FOR DEMOLITION OF
STRUCTURES PURCHASED THROUGH THE
EXPANDED NEW HOME PROGRAM
WHEREAS, the Housing and Redevelopment Authority (HRA) in
and for the City of Richfield will acquire substandard
properties; and
WHEREAS, demolition and site clearance will be required to
prepare these properties for redevelopment; and
WHEREAS, it is anticipated that the cost of demolition will
exceed $15,000 and a formal bidding process is required. in this
event..
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority in and for the City of Richfield,
Minnesota, that a formal bidding process for demolition be
initiated.
Passed by the Housing and Redevelopment Authority in and for
the City of Richfield, this 16th day of 3uly, 1990.
Thomas E. Harms, Chairperson
ATTEST:
Joan Helmberger, Secretary
•
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 15
Agenda June 18, 1990
Issue Statement:
Authorization to transfer CDBG Year XV Economic Development Funds
to the Technical College New Dome Program.
Background•
For Year XV, 510,000 was identified to establish a loan interest
buy down program in the ILN. The concept was to identify pilot
properties which needed exterior renovation and/or code violation
work. The property owner would obtain a loan from a commercial
lender. The CDBG funds would be used to buy down the interest on
the loan to make it more affordable. This would be the beginning
of a process to bring more visual unity to the retail area along
Lyndale Avenue north of 77th Street.
The need for such a program continues to exist. However, the
appropriate time has not yet arrived. The priorities in the ILN
should be the following:
a} Redevelopment of the area south of 77th Street by
Robert Larsen Partners;
b) The installation of a parking lot on the west side of
Lyndale Avenue between 77th and 76th Streets. (The
1985 Plan approved by the HRA and City Council identifies
the need for such a parking facility);
c) Facade treatment and rehabilitation program in the
Lyndale Avenue retail area north of 77th Street.
Business people have indicated they think the creation of a
parking lot should be the next activity in the area. When the
Larsen proposal is under construction, it would be appropriate to
pursue the parking lot project.
It would be desirable to transfer the funds to the existing New
Home Program as there is an immediate need to acquire a garage
house site for the next Hennepin Technical College project
(Summer, 1991). A parcel needs to be purchased so that design
work can be initiated this summer on the new project. The
$10,000 when combined with the $31,000 balance available from
Year XV would make it possible to purchase a suitable property.
Recommended Motion:
1. Authorize amendments to the Third Party Agreement to shift
CDBG YR XV funds from the Economic Development Commercial
Rehabilitation Program to the Scattered Site Program
(New Home).
2. Request the City Council to approve this request and
effectuate the necessary amendments to agreements with
Hennepin County.
Basis of Recommendations
1. The CDBG YR XV funds must be expended by December 31, 1990.
.7
2. The ILN project priorities should be focused first on the
redevelopment of the area south of 77th Street and, secondly,
on locating and installing a parking facility between
76th and 77th Streets west of Lyndale Avenue.
3. The New Home Program is in need of additional funds,to
purchase a property for the 1991 project.
Alternative. Recommendation:
1. Do not authorize transfer of the funds.
2. Transfer the funds to the Deferred Loan Program.
Discussion/Decision Mode:
Action by the HRA on June 18 would make it possible for the City
Council to consider the request at their June 25 meeting.
Respectf ly submitted,
James Prosser
Executive Director
JDP:cak
•
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 16
Agenda June 18, 1990
Issue Statement•
Review of proposal to implement an Expanded New Home Program.
Background:
On January 16, 1990, the ~YRA adopted a motion directing staff to
proceed with the formulation of an expanded New Home Program.
Since January, staf€ has met weekly to formulate. this program.
The ad hoc committee consisted of Kathy Jablonsky, Cathy Jones,
Bruce Nordquist, Diane Nordquist and Bruce Palmborg. Ron Batty
from Holmes & Graven was also a member.
This letter and attachments provide a description of the program.
The attachments include:
Time & Activity Schedule;
Summary of Housing Conditions; and
Summaries of the following:
Procedural Guidelines
Redevelopment Plan
Tax Increment Financing Plan
Developer's Agreement
The complete documents follow the summaries.
While the expanded New Home Program is new, it is the result of
combining successful elements of existing redevelopment and
housing programs used by the HRA.
• Objectives
The objectives of the expanded New Home Program are stated in
the Procedural Guidelines, the Redevelopment Plans and the Tax
Increment Plans. In summary form, they are as follows.
a) 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.
b) To provide an opportunity for Richfield to house families
seeking larger housing units with features popular in
today's market. This housing would encourage existing
residents seeking this type of housing to remain in
Richfield and attract new residents as .well.
It is the intention of staff to continue the existing New Home
Program. With that program, Richfield will continue to
attract the first time home buyer through use of CDBG funds
and Hennepin Technical College students.
• Financingx
Financing of program activities would be provided by three
sources; 1) City funds, 2) proceeds of sale from developers
and 3) tax increment.
The HRA would utilize City funds to purchase a property. A
few minutes after completing the purchase, the property. would
be sold to a developer. The difference between the purchase
price paid by the HRA and sale price paid by the developer
would be returned to the City by the HRA through the tax
increment {TIF) over a period of 25 years.
- Estimated
from £ity
properties
- Estimated
developers
- Estimated
by TIF
startup funding
to purchase 27
proceeds of sale from
Net amount to be repaid
$1,620,950
$ 797,500
$ 746,077
With a 10$ increase in market value over the 25 years, TIF
revenues would cover the total amount of funds borrowed. An
analysis of market values in Richfield completed by Hennepin
County indicates that over the last five years, single family
home values have cumulatively increased approximately 10$ and
over ten years, values cumulatively increased 47$. Any
increase above the 10$ would make it possible to pay the City
interest on the funds borrowed. If both market value and tax
levy are held constant over the 25 year period, revenues
would fall short of the $746,077 by approximately $77,373.
An additional comment related to financing. The 1990
legislative session has tied Local Government Aid (LGA) to
the amount of tax increment generated by a newly established
redevelopment tax increment district. Beginning in the sixth
year and continuing through the 25th year of the TIF
district, LGA is reduced in an increasing amount. An
analysis of this impact indicates that, in 1996, the LGA
reduction would approximate $600. It would peak in 2001 and
continue at approximately $8,000 annually through the 25th
year of the district. The total cumulative dollar reduction
is estimated at $109,000. The present value of the $109,000
would approximate $19,000.
• Acquisition
All property purchased by the HRA would be required to meet
the following criteria:
r~
- Voluntarily offered for sale;
- Owner-occupied or vacant so as to avoid relocation
payment;
- Substandard as to condition and/or obsolete as to design;
- A developer has agreed to purchase from the HRA;
- Value determined by appraisal report, offer to owner
based on the appraised value, and authorization by HRA to
purchase.
Seven properties need to be acted upon immediately. The
owners are at a critical decision point. The houses are now
vacant and uninhabitable. If evidence of HRA interest in
purchase is not forthcoming, the owners will take action
which would make a purchase by the HRA in the near future
unlikely. Thus, the existence of these homes would be
perpetuated. The likely option to be exercised by the owners
would be rental, with little if any repair work.
Acquisition activities on these seven properties should be
initiated in the near future.. Title and appraisal work
costing approximately $7,000 could begin. This work would
not compromise processing of the proposed program by the
Planning Commission and City Council. The HRA would not be
presented with a request to purchase specific properties
until after City Council approval of the program. The $7,000
would be drawn from the HRA General-Fund. If funding is
approved by the City Council, the $7,000 would be returned to
the HRA General Fund.
• Redevelopment
Only competent experienced developers would be selected. It
is likely that approximately five to six developers would be
selected to construct up to 29 houses; each being responsible.
for approximately five homes.
A developer's agreement would establish the construction
schedule, minimum value of property after construction
($110,000 to $140,000), developers willingness to sign an
Assessment Agreement and provide the HRA access to the
property to demolish the substandard and/or obsolete house.
• Marketinc
Developers would be responsible for marketing the new homes.
At this time, staff has already collected a listing of 11
households which have expressed an interest in purchasing a
new home. Further, families with children enrolled in
Richfield Schools may offer a significant market. The houses
they would vacate may be suitable for new families moving
into the community.
•
Recommended Motion:
1. Review and discuss the proposed program and documents.
2. Adopt a motion directing staff to transmit to the Planning
Commission the Redevelopment and Tax Increment Financing
Flans with a request that they: i) find the Plans to be in
conformance with the Comprehensive Plan and ii) find the
proposed acquisition and disposition of identified real
estate to be in conformance with the Comprehensive Plan.
3. .Adopt a motion authorizing the expenditure of up to $7,000
from the HRA General Fund for title and appraisal work to
facilitate the removal of seven uninhabitable houses.
Basis of Recommendation:
1. The proposal is consistent with the concept presented in
January.
2. There is a market of voluntary willing owners who wish to
sell their substandard and/or obsolete homes.
3. There is evidence of a market for new larger contemporary
housing.
4. Conversations with Mr. Merlin Grant, President of Marvin H
Anderson Construction Company and Board Member of the MN
Builders Association indicate the program should be
marketable to developers.
5. Many of the program elements have been used previously in
both redevelopment and housing programs.
6. City monies to fund the program will be identified by staff
and a proposal for their use in this program will be
presented to the Council for their consideration.
7. Existing staff resources are available to administer the
program and can be funded from the current HRA New Home
Program.
8. Legal Counsel has reviewed the program and found it to be
in compliance with existing law.
9. Seven uninhabitable houses may not be available to the HRA
if action to acquire is not initiated immediately. Funds
to pay for title and appraisal work is available from the
HRA General Fund.
10. On March 5, 1990, the Richfield School Board adopted a
resolution in support of this program concept.
•
Alternative Recommendation:
1. Modify the proposal.
2. Terminate any additional activity on the proposal.
Discussion/Decision Mode:
Authorizing transmittal to the Planning Commission on June 18
will make it possible for the Commission to consider its opinion
on June 26. The HRA would then be able to act formally on the
proposal July 16. By following this schedule, it is likely
construction could begin in late 1990. (See following schedule).
Respectfully submitted,
Jame Prosser
Executive Director
JDP:cak
•
•
Expanded New Home Program
Activity Time Frame
HRA Meeting June 18, 1990
Review
Procedural 1~6anuaY
Redevelopment P~.an.
Tax Increment Finance Plan {TIF)
Developer's Agreement
Request of Planning. Commission
Find Redevelopment. and TIF
Plans in Conformance with
Comprehensive Plan including
acquisition and disposition of
real estate
Planning Commission Meeting June 26,.1990
Findings regarding Plan Conformance
(See shove)
HRA Meeting July 16, 1990
Proposal to approve
Redevelopment and TIF Plans,
funding request and
Procedural Manual and request
City Council to hold public
hearing and approve Plans.
Notice of Public Hearing published July 11, 1990
City Council public hearing on July 23, 1990
Redevelopment and TIF Plans and
consideration of proposal~to approve
the Plans and funding arrangement.
Order Appraisals Begin July 24, 1990
Select Developers Aug. - Sept., 1990
HRA Authorization Aug. - Dec., 1990
Purchase Property
Sell Property
Developer Agreement
Construction Start Last quarter of
(120 day construction period 1990 continuing
per house). into 1991
•
Expanded New Home Program
Summary of Housing Conditions
During a recent eight: day period, staff has had an opportunity to
inspect and .evaluate properties offered to the HRA.
Over half of the homes inspected are located on the back of the
lot or have other insufficient setbacks. The average size of the
homes inspected was 690. square feet. This is significantly
smaller than the average Richfield home at 930 square feet.
Property conditions vary widely. Some houses are vacant and not
habitable. Other homes are in substandard condition and/or
obsolete in design and use. Below are examples of specific
conditions noted:
Uninhabitable Structures
-Collapsed roof causing extensive water damage, animal and
insect infestation, mold and fungus growing on carpet and
walls.
- Essential structural support members rotted causing threat of
collapse in portion of house.
- No subfloor under kitchen sink area, only dirt. This is
unsanitary and neither weather or rodent proof.
- A bathroom area created in a back hallway. The shower area
consists of plastic sheeting fastened to the wall with duct
tape. An uncleanable plywood sub floor is also not moisture
resistant and there is no bathroom sink.
Substandard Structures
- Space heaters as the only source of heat causing insufficient
heat distribution. Properties with space heaters are not
eligible for FHA, VA or conventional mortgage financing.
- Siding, trim and soffit areas with extensive deterioration and
rot. A significant amount of trim and siding would have to be
replaced dust to provide a nailing surface for vinyl or
aluminum siding.
- Improper construction framing methods have caused sagging
floors, buckling walls, and functional problems with doors and
windows. Joists are undersized and over spanned, foists and
beams have been cut and not supported, and foists which
were embedded in the concrete foundation are now rotting.
- Hazardous electrical and plumbing system problems; plumbing not
vented allowing sewer gases into the house; flexible waste and
gas lines are used which are prone to leaking; extensive use of
extension cords and improperly installed wiring create safety
and fire hazards.
Obsolete Structure
- Small cellar type basements with steep, narrow stairway access.
Standard laundry appliances are too large for stairway
openings. In one home, a three foot section of a main support
beam had been cut out to allow room for a small freezer
to be moved into the cellar. The support was never repaired
and the main beam is starting to twist causing structural
problems.
- Limited or no storage area. The absence of cellar and attic
storage is common. Closet space is minimal and in some cases
no closets exist.
- Limited food preparation and storage. Small kitchens do not.
accommodate .the size of todays standard appliances.
Counter and cupboard space have been forfeited for standard
ranges and refrigerators.
- No dining area in kitchen or other room. Small living areas
have insufficient room for a dining table. Families, instead,
eat in a make shift manner in the living room.
- Inefficient room layout requires that bedrooms be passed
through to access the bathroom. In one instance, a bedroom
.must be passed through to enter a second bedroom.
- Bedroom size does not accommodate a standard bed and dresser.
As a result sleeping spaces have been created in cellars or
attic areas which do not have adequate ceiling height, light
and ventilation, or egress.
It is difficult to evaluate homes based only on exterior
conditions. Acute cottage home from .the street, may actually be
uninhabitable inside. A home with poor exterior maintenance and
conditions may actually be neat, clean and repaired inside.
Discussions with homeowners during the inspections indicated
their strong interest in selling through the Expanded New Home
Program. Generally, owners perceive difficulty in selling in the
marketplace because:
- homes cannot be conventionally financed; contract for
deed, sell-er financing is usually required.
- owners desire cash which can be used for a
replacement dwelling.
- many repairs are needed and owners are reluctant to incur
further out of pocket expense for a home that doesn't
provide pay back to the investment.
- a savings can be realized, minimal closing costs and no
realtor fees result by participating in the HRA program.
- owners are tired of substandard and inefficient housing
and "want out".
- the hot~es ere _the least desirable in the market place and
owners would prefer to rent the substandard dwelling to
someone else theta shay..
H90-3-0129
r]
•
Expanded New Home Program
Procedural .Guidelines
Summary
The "Procedural Guidelines" set forth the process to be followed
in administering the Expanded New Home Program. Many of the
procedures have been utilized in existing programs. The Table of
Contents lists the administrative subjects.
Pages one through six discuss the procedures to be followed in
selecting, evaluating and purchasing garage and cottage type
homes.. .All structures must be substandard and/or obsolete. The
actual purchase of a property and the dollars paid require
authorization by HRA. Tenant occupied property will not be
purchased because of the financial burden of relocation payments.
Owner-occupants must sign a waiver of relocation benefits. No
property will be purchased without having a developer who has
agreed to buy it from the HRA.
Beginning on page six and continuing through page ten are the
procedures related to developer selection, housing and site
design, and developer solicitations. Successful performance is
critical with this program,-thus the Developer Selection Criteria
is designed to encourage only developers who have a successful
track record, are financially strong and build several homes a
year. For this program, each developer would construct five to
• six homes. If there are .more than enough developers for the
property available, selection will be made by lottery.
Procedures regarding sale of property to developers begins on
page ten. The sale price will be determined by a reuse appraisal
undertaken by an independent appraiser. To maximize the amount
of tax increment, a minimum market value will be established for
each parcel. The value will range from $110,000 to $140,000. To
help determine the minimum market value a "neighborhood
evaluation" will be conducted by the appraiser as part of the
reuse appraisal. The basis for the sale will be a public hearing
and approval by the HRA of a developer's agreement.
The construction plan review is discussed on pages 11 and 12.
The HRA will be responsible for demolition of existing
structures. That process is discussed on pages 12 and 13. At
the time of sale of the property to the developer, the developer
will execute a license granting the HRA the right to enter the
property for demolition. Because construction will follow
shortly after demolition, and to minimize costs, the cellar or
basement spaces will not be backfilled or fenced, the sides will
be tapered.
All existing structures will be demolished. Sale of structures
for removal from the site will not be considered for reasons
outlined on page 14.
The last page number 15 contains statements regarding the
management of program funds.
At this time, all appraisal work will be handled by one firm, BCL
Appraisals, Inc. The "Procedural Guidelines" do not specify that
one firm must prepare both acquisition and reuse appraisals, nor
do the "Guidelines" specify the firm. However, BCL has ..provided
favorable pricing for the appraisals. Staff also worked with
them to formulate the "neighborhood evaluation" which is key to
the success of this program. Mr. Brad Bjorklund is a principal
of this firm. He has consistently provided high quality
appraisals to the HRA.
R90-3-0147
Expanded New Home Program
Redevelopment and Tax Increment Plans
Summary
Rather than starting at the beginning of the Plan documents, the
first paragraph below is intended to explain the basic concept of
the Plans.
The Expanded New Home Program activities will be conducted from
within two large redevelopment projects known as Redevelopment
Project Area "A" and Redevelopment Project Area "B" (see page 34
or 68 for map both of which are the same). Each redevelopment
project area will have a tax increment district, Tax Increment
Redevelopment District "A-1" and Tax Increment Redevelopment
District "B-1" respectively. Each district will be composed of
parcels purchased by the HRA. They are located on the maps, page
34 or 68 and listed on pages 16 and 50. The same properties are
also listed on pages 35 and 69. The only parcels which could
become part of district "A-1" and "B-1", would be those listed.
No property will be purchased 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.
In project "A", there are 19 properties listed and project "B"
• lists 8 for a total of 27. However, two of the parcels are
double lots. Twenty-seven properties are listed but 29 new
houses may be constructed.
The balance of the Plan documents are similar to those previously
reviewed and approved by the HRA and City Council for other
projects such as the ILN and PASSS. A few of the more
significant features of the documents are briefly identified as
follows.
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-1" and
"B-1" 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 14 of the "A" document. They are
the same in all documents.
•
The budgets for each project area appear in the Appendices and
total $1,140,669 for project "A-1" page 37 and $480,281 for
project "B-1" page 71. The total estimated budget is $1,620,950.
The proposal is to create two TIF redevelopment districts with a
25 year life. The only increment .captured by the two districts
would be.that generated .from the property on which new homes were
constructed. No bonds would be issued.
A perusal of the Table of Contents in plan document "A" pages 9
and 10 and plan document "B" page 43 and 44 will reveal a full
listing of all topics.
R90-Summary
•
•
Expanded New Home Program
Developer's Agreement
Summary
Significant features of the "Contract For Private Development"
follow. The Contract is very similar. to those used in the LHN and
ILN.
- A Contract will be executed with each developer.
- For cost and time effectiveness, virtually the same contract
will be used with all developers.
- A contract must be executed by a developer prior to HRA
purchase of property for subsequent sale to developer.
- The sale price of the property will be stated.
- Beginning and ending construction dates will be specified.
- Certificate of Completion will be provided by HRA at the
appropriate time.
- Developer must provide Letter of Credit equal to the amount of
HRA write down and cost of demolition for each parcel.
- Developer and "successors and assigns" are obligated to pay
real estate taxes. HRA may sue for non-payment.
- Assessment Agreement and Certification of Assessor.
- License Agreement which when executed grants HRA the right to
enter property and demolish the existing structure.
- Insurance must be carried during construction.
This Contract is an attempt to balance the need of the HRA and
City for protection of their investment, with the need of the
developer to market a home. Although staff has interviewed
developers in formulating this entire program, the real impact of
the HRA's right to sue for non-payment of taxes and of the
Assessment Agreement on the marketability of the homes is
unknown. While other communities have operated scattered site
TIF programs, the funding source has not required the use of
these two features.
R90-3-0148
•
RICHFIELD
EXPANDED NEW HOME PROGRAM
PROCEDURAL GUIDELINES
DRAFT
6/12/90
C7
Table of Contents
Page Number
Statement of Purpose ....... ........... 1
Program Objectives ..................... 1
Definitions ............................ 1
Data Privacy ........................... 1
Seller Solicitation Procedures.......... 1
Property Selection Criteria ............ 2
Property Evaluation Procedures ......... 3
Acquisition Procedures ................. 5
Developer Selection Criteria ........... 6
- Housing Design and Site Development
Criteria ............................... 7
Developer Solicitation Criteria ...... 9
Developers Selection Procedures ...... 9
Procedures for Sale to Developers .... 10
Property Closing Procedures ............ 11
Plan Review Process .................... it
Procedures for Evaluation
and Demolition ......................... 12
General Program Marketing .............. 14
Internal Fund Management ............... 15
•
•
Richfield
Expanded New Home Program
Procedural Guidelines
Statement of Purpose
This document. has been developed as a guidance tool for Program
Administration. This document should not be interpreted as
constituting any contractual agreement or liability by the City
or HRA.
Program Obiectives
- Replace small lower value housing on scattered sites
throughout the City with larger, new, higher value housing
designed for families.
- Eliminate the blighting influence of substandard housing,
thus improving residential neighborhoods.
- = Alleviate the shortage of standard housing for families.
These objectives will be achieved through the acquisition of
property and the development of new single family homes.
Definitions
HRA - Housing and Redevelopment Authority in and for the
City of Richfield
Voluntary Acquisition - The acquisition (purchase) of real
property which results from a voluntary proposal to sell
from an owner in response to an invitation or
solicitation for offers.
Developer - Developer or Builder who has entered into a
Development Agreement with the HRA to purchase
specific lots and develop them with new single family
homes.
Data Privacy
All files and information which identifies property and persons
is private and cannot be released. All information secured
through the program is subject to the Data Privacy Act.
Seller Solicitation Procedures
1. HRA staff will solicit for sellers by direct mail, _
advertisement, or other method. The number of
properties purchased will be determined by the availability
of resources and properties.
1
2. Sale to the HRA must be on a voluntary basis. Interested
sellers are required to respond to the HRA solicitation in
writing, with an offer .indicating:
a. An interest in selling their property to the HRA.
b. A willingness to waive relocation benefits.
c. Statement of tenant interest in the property at the
time of offer.
d. Consent to the release of relevant information to
potential developers.
3. Owners that have been surveyed and have an interest in
selling must be contacted to inform them of the project
time line and solicit the required written response.
Proverty Selection Criteria
HRA staff will prepare property fact sheets for properties which
owners have expressed an interest in selling, and make a driveby
inspection. Properties will be evaluated based on the following
criteria. To be eligible for acquisition properties must meet
criteria #1 a, b, c or d; and #2, through #6.
1. The property is:
a. Substandard as to condition, size or usage.
b. Obsolete and faulty design for block and area in which
it is located.
c. A deteriorating factor which has caused blight to other
adjoining properties.
d. Detrimental to the safety or health of abutting
properties in the block.
2. The estimated market value of the property is within
appropriate limits established by the HRA for tax increment
feasibility. An effort will be made to acquire the lowest
value properties first. Neighborhoods should be able to
support a minimum sales price of $110,000 for new
construction.
3. The site can be developed with a single family home
within city code requirements, including zoning and
conformance with the Comprehensive Plan.
4. The property must be owner-occupied or vacant before the
owner should consider offering it to the HRA. Tenant
occupied properties will not be considered for purchase.
5. The relationship of the property to other projects does not
cause a negative impact on development. Other projects to
be considered are:
2
a) Established Commercial Redevelopment areas.
b) R-O-W improvement projects 494/35W/62nd/77th/66th/other
c) Airport noise exposure zones:
- 65 to 69 Ldn
- 70 to 74 Ldn
d) Storm Water Flood Prevention Improvements Projects
e) Other
6. Prior to acquisition by the HRA, properties must be
evaluated for historical significance. This will be
accomplished by forwarding general property information
and a property photo to the Minnesota Historical Society for
review. This should be confirmed prior to signing a purchase
agreement. The HRA will not purchase property which
qualifies for the National Registry of Historical Structures.
Pr~erty Evaluation Procedures
1. Based on the above information, HRA staff will identify the
best candidates for acquisition. The following will be
.considered in that evaluation:
a. Properties must be immediately available to meet the HRA
development time frame.
b. Properties with one or more of the following
characteristics should be considered first:
- lowest values
- poorest visible conditions
- located in average to better neighborhoods
c. Properties purchased should be equally distributed by
location and value through the districts when possible,
and provide a viable financial mix of properties to
support program financial requirements.
Given the above considerations, each site will be evaluated
on a case by case basis.
2. Once an offering letter is received, HRA staff will contact
the owners of the properties and arrange an inspection of the
interior for blight qualification. The following information
will also be obtained during the this inspection:
a. Demolition specification information (See Procedures
for Evaluation and Demolition).
b. A determination as to the existence of any hazardous
materials on the property. This includes:
- a visual inspection
- a statement from the seller regarding any knowledge
of the properties use for production, storage,_deposit,
or disposal of any toxic or hazardous wastes or
substances.. or asbestos products whatsoever, during the
time seller owned property and prior to the-date of
3
seller purchased property. Properties with
environmental problems or hazards may be considered if
the purchase price is reduced sufficiently to cover
increased site clearance and preparation costs.
3. If a property meets the blight test, acquisition procedures
will continue. If the blight test cannot be met, the
property cannot be considered for acquisition.
4. For properties .meeting the blight test, sellers will be
asked to provide the Abstract or RPA (as applicable) to the
HRA to facilitate the rendering of a Title Opinion. The cost
of updating the Abstract or RPA will be the sellers if a sale
.occurs. If no sale occurs, the HRA will bear .the entire cost
of updating the Abstract or RPA. The HRA will provide a
written receipt when. receiving and returning an abstract
or RPA.
5. Legal Counsel will be responsible for having the Abstract
or RPA updated. and will contact staff as quickly as possible
with an oral opinion of title. A written opinion will
follow shortly thereafter.
6. If the Title Opinion indicates the property has marketable
title, purchase procedures will continue. If the Title
Opinion does not indicate a marketable title, the HRA, at
its sole discretion, may choose not to acquire the property.
The HRA may determine remedies and evaluate their
resolution, including the additional time and expense to
provide marketable title. The HRA may proceed to correct
title deficiencies once a Purchase Agreement is executed
by the seller.
7. If a variance is required to redevelop the property, the
HRA-may, at its sole discretion, chose not to acquire the
property. This determination will be made based on the
project time lines, available resources, and availability
of more desirable properties which do not require a variance.
8. If the HRA chooses to continue with the acquisition, a fee
appraisal will be ordered to determine the purchase price
of the property (to present to the seller), and the reuse
value as a vacant lot, and a finished price range
for. new single family construction (to present to the
developer).
The independent fee appraiser will be carefully instructed
to document in specific terms the conditions of the
property; details regarding structural condition and
floor plan. The acceptance. of these conditions in the
market place should be discussed in the report. The
appraisers value judgement should reflect these conditions.
4
9. In some instances the Title Opinion and fee appraisal may be
obtained simultaneously to facilitate a timely acquisition.
Acquisition Procedures (Sale to HRA)
1. When a purchase price has been determined, the seller
will be informed of:
a. .The purchase price
b. How the purchase price was determined.
c. If negotiations fail, and the offer is not accepted,
the HRA will not acquire the property.
2. A development agreement must be executed by
developer prior to the purchase agreement b.
seller. No property will be considered for
by the HRA unless the development agreement
agreement have been signed by the developer
respectively.
the selected
ping signed by the
acquisition
and purchase
and seller
3. Once a negotiated price has been reached, a purchase
agreement and "waiver of relocation payment" form
Must be executed by the seller for the acquisition process to
continue. The relocation benefits which the seller agreed to
waive must be clearly explained at this time if not explained
previously.
4. Following execution of the purchase agreement by the
seller, demolition specifications can be developed.
5. The .Richfield Planning Commission must determine whether
the acquisition and disposition of the property is in
conformance with the Richfield Comprehensive Plan. Several
properties may be simultaneously presented to the Planning
Commission for review. (This is an administrative finding
that does not require public hearing).
6. The HRA will be requested to simultaneously authorize:
a. Purchase Agreements
b. Development Agreements
c. Public Hearing of Disposition to Developer
d. Initiation of Demolition Bidding
(Agreements for several properties may be presented
to the HRA at one time).
7. Following HRA authorization of these agreements: __
a. A simultaneous closing will be scheduled with the
seller, HRA and Developer.
5
b. Developer will be requested to provide evidence of
insurance and financial ,security prior to closing.
c. Seller will be requested to assemble or supply all
required documentation prior to closing.
d. The public bidding process for demolition will be
initiated.
8. The seller must be prepared to vacate the property on the
day of closing.
9. The developer shall pay for the vacant lot and provide
final evidence of insurance and financial security at
closing. (See Development Agreement requirements and
Procedures for Developer Selection and Sale to Developers).
Special considerations during the acquisition process:
a. Non-homestead vacant property will be considered for
acquisition.
b. Tenant occupied property cannot be acquired.
c. Property expenses related to maintenance, taxes, and
insurance, are not anticipated since the HRA will not
retain title to the property.
d. Review appraisal services may be part of the
negotiating process to determine purchase price if the
fee appraisal report values the property below the current
assessor's market value.
e. Annual number of acquisitions is influenced by available
resources (funding and staff).
Developer Selection Criteria
Private developers will be selected by the HRA to construct new
single family homes on identified lots. Developers must meet the
following requirements:
1. Demonstrate financial capability by:
a. A statement from a financial institution of available
construction capital; and
b. A letter of credit; or
c. A performance bond; for the value of the construction.
2. Provide favorable references from:
a. Five satisfied customers.
6
b. Three major suppliers, one being the construction
lumber supplier.
3. Demonstrate proof of insurance as specified in Developers
Agreement.
4. Possess H.O.W. insurance or equivalent to perform warranted
repairs required by MN State statute.
5. Agree to the terms of the Development Agreement.
6. Agree to complete construction within the time frame
specified in the Development Agreement. Every effort
will be made to complete construction by December 31st of
the construction year, for purposes of tax increment
capture.
7. Preferential. consideration will be made to developers
meeting the following requirements:
a. Have experience working on infill projects.
b. Have been a member of the Minnesota Builders
Association (MBA) for the previous three (3) or more
years; or be able to have met their requirements for
the previous three years.
c. Have a demonstrated record of building at least three
(3) homes a year for the past five (5) years. (See
item 2, above)
Housing Desicn and Site Development Criteria
Siding, exterior facade presentation, roof, window, siding and
building line variability, finished landscape, interior space
function and use are all important considerations.
The development of all sites shall meet the development
' objectives listed below. The guidelines were created to insure
that the homes built on the identified lots blend in with the
surrounding neighborhood and respond to specific concerns of the
HRA.
1. General:
a. Each home shall be single-family, owner occupied.
b. The value of each new home must meet or exceed the
value specified for each property in the development
agreement.
2. Site Standards:
7
a. The grounds shall be finish landscaped to be
aesthetically pleasing in all seasons. Land forms and
plants materials shall be used to define the site and
blend with adjoining property.
b.. Utility meters shall be screened from street view;
locations must be specified on plans.
c. Site drainage shall be accommodated on the site so that
water is directed away from the new home and the
neighboring properties.
d. Existing trees shall be preserved when possible. Care
should be taken to preserve existing root systems. A
tree wrap, with board reinforcement shall be used on
trees directly adjacent to active grading and
construction areas.
e. The construction site, neighboring property and
adjacent public streets shall be kept free of
construction debris at all times.
3. - Building Standards:
a. The home shall be a 3-4 bedroom, 2 bathroom structure.
b. A two car garage, attached or detached, must be
provided on the site for single family detached units.
A minimum of one enclosed parking space per unit will
be required for attached single family units.
c. Exterior materials (siding, soffit, doors and windows),
should be low maintenance. Aluminum and vinyl are
preferred. Natural cedar lap is acceptable if properly
stained or painted. Hardboard, whether panels or lap
siding, are not acceptable.
d. Unit height and mass of the new homes shall be
compatible with the scale of the surrounding
neighborhood.
e. A full basement shall be provided in the house unless
the selected design results in a split level, garden
level type of basement.
f. All building plans must have been prepared in
consultation with an Architectural Designer with a
minimum two year technical degree. An Architect may
also be consulted.
g. All construction must conform to the Sound Attenuation
Building Standards for properties located in 65-69
and 70-74 Ldn zones. A copy of the Sound Attenuation
Building Standards Specifications will be provided
to developer building in those zones.
8
Developer Solicitation Cri eria
1. The HRA will advertise in professional publications or
newspapers, by direct mail, or other methods as deemed
appropFiate, to solicit developer interest. The initial
solicitation will include general program information,
specific properties will not be identified.
2. A program information package will be available upon
request to all interested developers. The information
package will include the following:
a. Developer requirements and application, (See Developer
Selection Criteria)..
b. Program summary information to include:
- Program Objectives
- Housing Design Criteria _
- Plan Review Process
- Developer Selection Process
- Demolition Process
- Procedures for Sale to Developer
- Construction Timeframe
c. Sample Development Agreement
d. Informational City Map indicating:
- School locations
- Parks
- Bus routes
e. A deadline for submission of application. Developers
will generally be given two weeks to complete and
return applications.
f. This package will not include specific property,
identification.
Developer Selection Procedures
1. Upon receipt of applications, HRA staff will evaluate
developers based on requirements set forth in the "Developer
Selection Criteria".
2. HRA staff may reject or accept proposals at its sole
discretion, so long as the developers selected adequately
meet the Developer Selection Criteria.
3. If the number of qualified developers exceeds the number of
available property groups, developers will be selected by
lottery.
•
E
4. The HRA will group lots for sale to developers as follows:
a. Groups will contain a minimum of 5 to 6 lots, when
possible.
b. To accomplish a balanced distribution of more and less
desirable lots, lots will be grouped together to provide
a mix of projected new home value opportunities in a
variety of locations.
5. Property groups will be assigned to developers by lottery.
6. Alternate developers will also be selected.
Procedures for Sale to Develover
1. The vacant lots will be sold to developers at fair. market
value as determined by HRA staff based on independent
appraisal.
2. A development agreement will be presented to the developer
for consideration. The development agreement is of a
standard form which includes conditions for acquisition and
development of property. One element of property
development is the Assessment Agreement which prescribes a
a minimum market value for each property provided to the
developer. Minimum values are presented in two ways:
a) Minimum Values per property
b) Minimum Value total for the package of properties
provided to the developer.
The HRA will provide recommended values per property
and per package.
The developer may review and accept or modify values per
property. However, total values per package may not be
modified.
3. The selected Developers will be required to execute
Development Agreements for each property being developed.
A purchase agreement can then be signed by the seller.
4. If the selected developer is not willing to sign a
Development Agreement for each property in the identified
group, the properties will be offered, to an alternate
developer.
5. The following items specified in the Development Agreement
will require discussion and negotiation with the developer:
- Construction start and completion dates.
- Guaranteed minimum value of property upon completion.
- Developers willingness to sign an Assessment Agreement.
10
• - A license provided to the HRA for the purpose of
completing demolition work.
- Design Criteria
6. Following execution of Purchase Agreements by the sellers
and subsequent Development .Agreements by the Developer, the
HRA will be requested to authorize:
- Purchase Agreements
- Development Agreements
- Public Hearing on disposition of property
- Demolition public bidding process
7. Following HRA authorization of these items:
- The Public Bidding process for demolition will
be initiated.
- A simultaneous closing will be scheduled with the'
seller, HRA and developer.
8. Prior to closing, the developer will be required to provide
evidence of insurance and financial capability as identified
fn the Development Agreement.
Property Closing Procedures
A simultaneous closing will take place with the seller, HRA and
developer. The HRA ownership of the property will pass to the
developer at closing. The HRA will not retain title to the
property longer than the closing meeting. The following will be
required at the closing:
1. The seller will be required to provide a Warranty
Deed to the HRA.
2. The HRA will convey the property to the developer by
Quit Claim Deed.
3. The Developer must provide evidence that all post closing
agreement requirements to proceed with construction, have
been met. This includes but is not limited to insurance
documents and letters of credit. The letter of credit
will be an amount equal to the amount of the HRA net
contribution (acquisition price minus land value plus
site preparation costs).
4. A license on each property will be provided by the
developer to the HRA for the purpose of completing
demolition work.
5. The HRA will prepare all statements, affidavits,
documents, and general release forms required for
closing.
Plan Review Process
1. The following must be provided to the Building Official,
by the developer:
11
- Plans (2 copies)
- Land Survey (2 copies) with building elevations,
site drainage patterns and easements.
- Energy Calculations
- Any engineering plans (curb cuts, etc.) to be routed
through Building Official to the engineering division.
2. The Building Official will be asked to review plans for
structures located in the Ldn 65-69 and 70-74 for
conformance to sound attenuation building standards.
3. The Building Official will forward the plans to HRA staff
for review.
4. HRA staff will review all plans to assure conformance with
Housing Design and Site Development Criteria.
5. If any element of the plan is in conflict with the above.
criteria, HRA staff will notify the Building Official. The
Building Official will notify the developer of any conflicts.
6. The developer must resubmit the revised plans for final
approval unless resolved to the satisfaction of the Building
Official by modification to original office copy of
submitted plans.
7. Each plan review by HRA staff, will be completed in a timely
manner. Review time approximates one week. Each plan
submitted will be processed individually. Upon completion
of review by the BRA, a review checklist will be signed
and attached to the plans, and the plans returned to the
Building Official.
8. HRA staff will refer the plans to the County Assessor to
make a preliminary determination of value based on plans
and amenity package.
9. The Developer, County Assessor, and the HRA will execute
an Assessment Agreement and Certification of Assessor for
each property, to guarantee the minimum development
value. This Agreement will run with the land until the
expiration date of the tax increment district.
10. Housing design and site development criteria have been
reviewed and approved by the BRA.
Procedures for Evaluation and Demolition of Structures
DEMOLITION•
.The HRA will be responsible for demolition and site
clearance of acquired properties. Procedures are as follow:
•
12
1. Properties will be inspected by staff for the purpose of
preparing a demolition specification. This inspection
shall be completed simultaneously with the blight
qualifying inspection. The following items will be
noted:
a. Property legal description and documents of record.
b. Approximate size of basement or cellar, structure
(copy of assessing drawing if available).
c. The existence or non-existence of a well.
d. Number of out buildings for removal - sheds,
garages, others.
e. Concrete walks, patios, driveways, and slabs.
f. Existing fences, retaining walls or any other
type of permanent landscape materials.
g. Miscellaneous yard debris, fixtures, landscape
timbers and stones, foundation plantings.
h. Existence of asbestos building materials.
i. Structural or other factors that will affect
demolition.
2. Contractors will be instructed to taper edges of all
excavated areas to an acceptable slope for safety,
keeping soil disturbances outside the building area to a
minimum. The slope will be a minimum of 2 to 1. There
will be no backfilling or fencing of excavated areas.
3. Individual demolition specifications will be prepared for
each property following the execution of a purchase
agreement. As many properties as possible
will be assembled as one package and bid as one fob
depending on the timing. A separate price will be
required for each property.
4. A Public Hidding Process will be used in the selection
of a contractor pursuant to Minnesota Statute 471.345.
The Public Bidding process shall begin immediately
following HRA authorization of purchase.
5. In addition to general advertisement, required by
statute, desired contractors will be solicited.
6. A Demolition Contract will be executed by the demolition
contractor and the HRA for structure removal and site
clearance as specified by the HRA. The Developer must
contract independently with the Demolition Contractor if
additional demolition work is desired.
7. Prior to site clearance an
sent to adjoining property
the program and anticipated
Neighborhood meetings on a
not anticipated.
informational letter will be
owners to further explain
development schedule.
site by site basis nre
13
8. Demolition will be scheduled to occur as soon as possible
following the HRA sale of the property to a developer.
A license will be provided by the developer to allow
the HRA to complete demolition and clearance work on
the site.
9. Soil corrections and compaction will be the
responsibility of the developer.
10. The sale of structures to house movers will not be
considered based on the following:
a. The properties purchased are small and blighted,
generally not desirable to movers.
b. Movers require a minimum of 60 days following award
of bid, to remove a structure. House mover's
schedules and unanticipated weather conditions could
prolong this time. Delays cannot be accommodated
in the HRA's development schedule.
c. Movers would have minimal interest, if any, should
the HRA require structures to be removed from the
site prior to 60 days following the bid award.
_ d. The HRA would be required to follow public bidding
process for the house moving as well as remaining
demolition work. The time frame for this process
cannot be accommodated in the development schedule.
General Program Marketing
Marketing for the sale of the new homes will be the
responsibility of the developer.
Program marketing by the HRA will be limited to the following:
1. Developer solicitation.
a. The HRA will request proposals from developers
by advertising in professional publications or
newspapers, by direct mail, or other methods as
deemed appropriate.
2. Public Promotion.
a. The HRA will periodically provide information about
the program through articles or information pieces
in the "Your City, Your Schools" publication to
promote community awareness.
b. When possible, a public open house will be held to
provide an opportunity for residents and other
interested parties to collectively view the
finished homes. _
c. Marketing through the schools.
14
Internal Fund Management
The program is financed with tax increment and other resources
made available to the HRA from the City. The following
conditions apply:
1) No bonds will be sold.
2) The City Council and HRA will designate the funding sources
which will be borrowed.
3) The funds will be made available in a separate account
to be drawn as needed to cover project expenses.
4) The funds that the HRA borrows will be repaid to the City
over a 25 year period if sufficient funds are generated
through Tax Increment. Interest may be paid if the funds
generated exceed the principal amount borrowed.
5) The payment to the City from the HRA through tax increment
would be made following receipt of property tax
payments from Hennepin County.
r
•
15
Draft 6/13/90
~~
c.c.c...cc.--~ccc~c~cc=cc..ccc..ccc.ac-.sc-c~=c.~a=S:czc==ceccmcc
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR
THE CITY OF RICHFIELD, MINNESOTA
MASTER PLAN
EXPANDED NEW HOME - SCATTERED SITE
HOUSING PROGRAM
FOR
REDEVELOPMENT PROJECT AREA "A"
TAX INCREMENT FINANCING DISTRICT "A-1"
AND
REDEVELOPMENT PROJECT AREA "H"
TAX INCREMENT FINANCING DISTRICT "B-1"
DATED: 1990
PREPARED SY:
The City of Richfield
Department of Community Development
Housing and Redevelopment Division
6700 Portland Avenue South -
Richfield, MN 55423 -
(612) 861-9760
MAYOR
STEVEN J. QUAM
CITY COUNCIL
Edwina Garcia Ivan Ludeman
Martin Kirsch Michael Sandahl
HOUSING AND REDEVELOPMENT AUTHORITY
Thomas Harms, Chair
Edwina Garcia Ivan Ludeman
Joan Helmberger Vern Luettinger
CITY MANAGER/EXECUTIVE DIRECTOR
James D. Prosser
r~
-3-
•
PLANNING COMMISSION
Thomas Ohnesorge, Chair
Nancy Edwardson
Michael Gallagher
Robert Nelson
Morris Nilsen, Jr.
Lorraine Prindle
Thomas Scaglia
William Snyder
David Sumnicht
CITY STAFF
U
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
r~
Diane Nordquist
Community Development Technician
-5-
DRAFT 6/13/90
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR
THE CITY OF RICHFIELD, MINNESOTA
REDEVELOPMENT PLAN
FOR
REDEVELOPMENT PROJECT AREA "A"
AND
TAX INCREMENT FINANCING PLAN
FOR
TAX INCREMENT REDEVLOPMENT DISTRICT "A-1"
•
OF THE
EXPANDED NEW HOME - SCATTERED SITE
HOUSING PROGRAM
DATED: 1990
=ccccc.~c~~~c~c=occacaaxc=xass=sxs=sc=~=:ssxcsze=aaa~=ccn==cascsa
PREPARED BY:
The City of Richfield
Department of Community Development
Housing and Redevelopment Division
6700 Portland Avenue South
Richfield, MN 55423
(612) 861-9760
-7-
•
TABLE OF CONTENTS
Part I.
Redevelopment Plan
for
Redevelopment Project Area."A"
A. Statement of Public Purpose
B. Statutory Authority
C. Description of Redevelopment Project Area.
D. Statement of Goals and Objectives
E. Development Activities and Agreements
F. Proposed Land Use .
G. 1~cquisition and Relocation Activities
H. Environmental Considerations
I. Redevelopment Plan Modification. .
J. Administration of Redevelopment Project
.Part II.
Tax Increment Financing Plan
for
Tax Increment Redevelopment District "A-1"
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.
PAGE
11
11
12
13
14
16
16
17
17
17
18
18
. 18
19
19
21
~. 21
22
-9-
I. Sources of Revenue 22
J. Original Tax Capacity 22
K. Estimated Captured Tax Capacity 23
L. Duration of the District 23
M. Estimated Impact on Other Taxing Jurisdictions. 23
N. Modifications of the Tax Increment
Financing District 23
O. Limitation on Administrative Expenses 23
P. Limitation on Duration of Tax Increment
Financing Districts 24
Q. Limitation on Qualification of Property in
Increment District not Subject to Improvement. 24
R. Limitation of the Use of Tax Increment 24
S. Notification of Prior Planned Improvements 25
T. Excess Tax Increments 25 •
U. Restrictions on Pooling; Five-Year Limit. 26
V. Assessment Agreements 27
W. Administration of the Tax Increment Financing District
and Maintenance of the Tax Increment Account 28
X. Annual Disclosure Requirements. 28
Y. Assumptions 29
Z. Municipal Findings 29
Appendix A: Map: Redevelopment Project Area "A". 33
Appendix B Property in the Tax Increment
Redevelopment District "A-1" 35
Appendix C: Estimate of Tax Increments. 36
Appendix D: Tax Increment Financing Budget. 37 .
Appendix E: Estimate of Impacts on Other
Taxing Jurisdictions ~. 38
-10-
Draft 6/13/90
PART I.
REDEVELOPMENT PLAN
FOR
REDEVELOPMENT PROJECT AREA "A"
A. Statement of Public Purpose
It is found that there is not in this city a sufficient
supply of adequate safe and .sanitary dwelling accommodations;
that in certain areas thereof there exist substandard conditions,
unsafe and unsanitary housing and buildings. and structures used
or intended to be used for living; which by reason of
sociological and technological changes, dilapidation,
obsolescence, overcrowding, and faulty arrangement or design of
building and improvements, lack of public facilities,
ventilation, light and sanitary facilities, or deleterious land
use, or obsolete layout, or any combination of these and other
factors are injurious to the health, safety, morals and welfare
of the citizens of this state; cause an increase and spread of
crime, juvenile delinquency and disease, inflict blight upon the
economic value of large areas; threaten-the source of public
revenues while decentralizing communities to areas improperly
planned and not related to public facilities; and require
citizens to occupy unsafe, unsanitary and overcrowded dwellings.
Therefore, in order to respond to public interest and protect
the overall economic stability of the housing area, redevelopment
of neighborhoods is required to create an economic environment
which fosters the growth of a healthy residential base and
encourages private enterprise to engage in redevelopment and new
construction to be implemented in accordance with a comprehensive
community plan. The Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota (HRA) and the City Council
of the City of Richfield, Minnesota (City) have determined that
public intervention is necessary in Redevelopment Project Area
"A" (Project Area "A") of the Expanded New Home - Scattered Site
Housing Program (Housing Program) in order to achieve goals and
objectives for the area .
8. Statutory Authority
The statutory authority for the undertaking of a
redevelopment project in Project Area "A" and the activities
proposed in the redevelopment plan relating thereto is conferred
upon the HRA pursuant to and in accordance with the Housing and
Redevelopment Authorities Act, Minn. Stat., Sec. 469.001 to
469.047, inclusive, as amended. Specifically, Minn. Stat., Sec.
469.027 establishes the requirements for redevelopment plan
preparation by an HRA prior to undertaking property acquisition,
redevelopment, development and other related improvements.
-11-
C. Description of the Redevelopment Project Area
In order to guide development and redevelopment in Project
Area "A", the HRA has created this redevelopment plan. Pursuant
to Minn. Stat., Sec. 469.002, subd. 12, the proposed project
meets the definition of a redevelopment project, defined in Minn.
Stat., Sec. 469.002, subd. 14, and will henceforth, be referred
to as the redevelopment project. The boundary for Project Area
"A".encompasses all that real property within an area described
as follows:
Beginning at the intersection of the southerly right-of-way
line of East 62nd Street and the easterly right-of-way line
of 11th Avenue South, thence, in a line easterly more or
less, along said southerly right-of-way line to its
intersection with the westerly right-of-way line of
Bloomington Avenue South. Thence, southerly along said
westerly right-of-way line to its intersection with .the
southerly right-of-way line of East 63rd Street. Thence,
easterly along said southerly right-of-way line to its
intersection with the easterly right-of-way line of 16th
Avenue. Thence, southerly along said easterly right-of-way
t6 its intersection with the northerly property line of Lot
2, Block 1, Iverson's Second Addition. Thence, easterly
along said northerly property line, as extended, to its
intersection with the westerly right-of-way line of 18th
Avenue South. Thence, southerly along said westerly right-
of-way line to its intersection with the southerly right-
of-way line of Diagonal Boulevard. Thence, southwesterly
more or less, along said southerly right-of-way line to its
intersection with the southerly right-of-way line of East
73rd Street. Thence, westerly along said southerly right-
of-way line to its intersection with the easterly property
line of Lot 5, Block 4, Henry Thernell Addition. Thence,
southerly along said easterly property line, as extended,
to its intersection with the northerly right-of-way line of
East 76th Street. Thence, westerly along said northerly
right-of-way line to its intersection with the westerly
property line of Lot 4, Block 8, Sunset Terrace. Thence,
northerly along said westerly property line, as extended,
to its intersection with the northerly property line of Lot
8, Block 8, Sunset Terrace. Thence, westerly along
northerly property line, as extended, to its intersection
with the easterly right-of-way line of Lyndale Avenue
South. Thence, northerly along said easterly right-of-way
line to its intersection with the southerly right-of-way
line of West 74th Street. Thence, westerly along said
southerly right-of-way to its intersection with the
easterly property line of Lot 26, Block 25, Irwin Shores.
Thence, southerly along said easterly property line, as
extended, to its intersection with the northerly right-of-
way line of West 76th Street. Thence, westerly along said
northerly right-of-way line to the intersection with the
westerly right-of-way line of Fremont Avenue South.
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. Thence, .northerly along said westerly right-of-way line to
its intersection with the northerly`right-of-way line of
Humboldt Avenue South. Thence, northwesterly and northerly
more or less, along said northerly right-of-way line to its
intersection with the southerly right-of-way line of West
73rd Street. Thence, easterly more or less, along .said
.southerly right-of-way line to its intersection with the
easterly right-of-way line of Lyndale Avenue South..
Thence, northerly more or less, along said easterly right-
of-way line to its intersection with the southerly right-
of-way line of West 68th Street. Thence, easterly along
said .southerly right-of-way line to its: intersection with
the .easterly right-of-way line of Pleasant Avenue South.
Thence, northerly along said easterly right-of-way line to
its intersection with the northerly property line of Lot 7,
Block 2, Ralph Hollenbach's First Addition. -Thence,
easterly along said northerly property line, as extended,.
to the easterly right-of-way line of Wentworth Avenue
South. Thence, southerly along said easterly right-of-way
line to its intersection with .the. northerly property line
of Lot 6, Block 2, Oaklane Addition. Thence, easterly
along said northerly property line, as extended, to its
intersection with the westerly right-of-way line of
Blaisdell Avenue South. Thence southerly along said
westerly right-of-way line to its intersection with the
southerly right-of-way line of West. 68th Street. Thence,
easterly along said southerly right-of-way line to its
intersection with the easterly right-of-way line of
Nicollet Avenue South. Thence, northerly along said
easterly right-of-way line to its intersection with the
northerly right-of-way line of East 67th Street. Thence,
easterly along said northerly right of way line to its
intersection with the easterly right-of-way line of First
Avenue South. Thence, northerly along said easterly right-
. of-way line to its intersection with the southerly right-
of-way line of East 66th Street. Thence, easterly along
said southerly right-of-way line to its intersection with
the easterly right-of-way line of 11th Avenue South.
Thence, northerly along said easterly right-of-way line to
the point of beginning.
(Also refer to Appendix A, Map: Project Area "A"
D. Statement of Goals and Objectives
The HRA determines that it is necessary, desirable, and in
the public interest to undertake a redevelopment project in the
City pursuant to the provisions of Minn. Stat., Chapter 469, as
amended. The HRA determines that the .funding of the necessary
activities and improvements in the redevelopment project area
shall be accomplished through the use of tax increment financing
and other revenue sources available to the HRA and City.
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The following goals and objectives are intended to serve as a
basis for guiding activities in the redevelopment project area: •
1. To develop strategies to encourage development and
redevelopment of single family homes.
2. To .maintain a positive environment within the residential
community.
3. To enrich the quality of life for residents through
planning.
4. To recognize the needs of all segments of the populace
.through diversity in housing stock which is a major
determinant of the. living environment.
5. To achieve a high level of design quality to enhance the
physical environment.
6. To achieve a balanced variety of housing stock
appropriate to the market area.,
~-. To enhance the residential tax base of the community.
8. To protect the surrounding residences from the adverse
effects of dilapidation and deterioration.
9. To eliminate unsightly, blighting, deteriorated, and
substandard structures.
10. To provide an expanded range of housing opportunities of
sufficient quality and size through development,.
redevelopment and new construction.
11. To provide maximum opportunity, consistent with the needs
of the city for development by private enterprise.
12. To coordinate elements of the City's Comprehensive Plan
with these project objectives.
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 sea• 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
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in order to support the private development activities include:
1. Property acquisition;
2. On-site clearance;
3. On-site improvements;
4. Remedial site environmental activities; and
5. Adjacent public improvements and utilities which service
site.
Descriution of Anticivated 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.
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 the developer. The general
requirements to be imposed upon the developer 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 .
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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; and
- Quasi-public (e.g. churches, cemetery, nursing homes,
private schools, and service organizations).
New uses will be restricted to single family residential.
G. Acquisition and Relocation Activities
1. Acquisition
- As a means of comprehensively formulating an expanded New
Home Program, HRA staff recently undertook the following
tasks to identify property for acquisition:
a. Analysis of residential property tax records with
estimated property values less than or equal to
555,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for. voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
The following property has been identified for
acquisition for Cycle I of the program:
PID 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 6325 - 15th Ave. So.
26-028-24-13-0046 6425 - 15th Ave. So.
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26-028-24-13-0047
26-028-24-13-0049
26-028-24-13-0051
26-028-24-13-0079
26-028-24-13-0102
26-028-24-13-0115.
26-028-24-14-0096
26-028-24-14-0116
27-028-24-42-0068
33-028-24-42-0014
34-028-24-11-0079
=34-028-24-12-0085
34-028-24-13-0094
34-028-24-14-0041
6415.- 15th Ave. So.
6407 - 15th Ave. So.
6400 - 15th Ave. So.
6518 - 15th Ave. So.
6538 Bloomington Ave. So.
6501 - 15th Ave. So.
6401 Bloomington Ave. So.
6507 Bloomington Ave. So.
6612 - 2nd Ave. So.
7435 Emerson Ave. So.
7039 - 5th Ave. So.
7129 - 1st Ave. So.
7216 - 1st Ave. So.
7320 - 5th Ave. So.
2. Relocation
The HRA accepts as binding its obligations under
provisions of federal and state law (Minn. Stat., Sec. 117.50
through 117.56) for relocation.
H. Environmental Considerations
Generally, the redevelopment project area is developed. All
proposed public and private development resulting from this plan
will be evaluated against existing environmental regulations.
I. Redevelopment Plan Modification
All redevelopment plan modifications will be processed in
accordance with Minn. Stat., Sec. 469.029, subd. 6.
J. Administration of Redevelopment Project
The redevelopment project and related housing program will be
administered by the Richfield Housing and Redevelopment
Authority.
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Draft 6/13/90
PART II.
TAX INCREMENT FINANCING PLAN
• FOR
TAX INCREMENT REDEVELOPMENT DISTRICT "A-1"
A. Statutory Authority
The statutory authority for the undertaking of a tax
increment financing district (TIF District "A-1") in
Redevelopment Project Area "A" (Project Area "A") for the
Expanded New Nome - 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.
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 an expanded New Home
Program. In order to gauge interest in the new program and
initially identify residential property for program
participation, the following tasks were undertaken:
a. Analysis of residential property tax records with
estimated property values less than or equal to
$55,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
A comprehensive, integrated approach for acquisition,
site clearance, and new construction has been formulated and
will be provided through program guidelines. The HRA will
assist prospective developers with development, ~~-
redevelopment, new construction, and other related activities
within the context of this Plan, the Redevelopment Plan and
other related guidelines.
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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 will be required to
be submitted to the HRA as part of the review process. The
following activities may be expected to occur:
1. Property Acquisition;
2. On-site clearance;
3. On-site improvements;
4. New construction;
5. Remedial site environmental activities; and
6. Adjacent public improvements and utilities which
service site.
For Cycle I of the Housing Program, a total of 27
properties have been identified for program participation and
acquisition. Nineteen of the properties are located within
Redevelopment Project Area "A" while the remaining eight are
within Redevelopment Project Area "B". (Refer to Appendix A
for map of Redevelopment Project Areas.) Redevelopment
Project Area B contains two properties with double lots. With
property subdivisions, two additional homes will be
constructed. Initial construction for Cycle I is anticipated
to begin .toward the end of the last quarter of calendar year
1990, with construction for each home to run 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-1" 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
the district to be established within Project Area "A" is a
r~
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redevelopment tax increment financing district as defined in
Minn. Stat., Sec. 469.174, subd. 10:
It has been ascertained 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.
""Structurally substandard" shall mean containing
defects in structural elements or a combination of
deficiencies in essential utilities and facilities,
light and ventilation, fire protection including
adequate egress, layout and condition of interior
partitions, or similar factors, which defects or
deficiencies are of sufficient total significance to
justify substantial renovation or clearance."
"A building is not structurally substandard if it is in
compliance with the building code applicable to new
buildings or could be modified to satisfy the building
-code at a cost of less than 15 percent of the cost of
constructing a new structure of the same square footage
and type on .the site. The municipality may find that a
building is not disqualified as structurally
substandard under the preceding sentence on the basis
of reasonably available evidence, such as the size,
type, and age of the building, the average cost of
plumbing, electrical, or structural repairs, or other
similar reliable evidence. If the evidence supports a
reasonable conclusion that the building is not
disqualified as structurally substandard, the
municipality may make such a determination without an
interior inspection or an independent expert appraisal
of the cost of repair and rehabilitation of the
building."
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 "Expanded New Home - Scattered Site
Housing Program: Blight Qualification Survey" which will be on
file at City Hall for the duration of the tax increment
district's life.
r
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F. Parcels in Acquisition
The following property has been identified for acquisition:
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 6325 - 15th Ave. So.
26-028-24-13-0046 6425 - 15th Ave. So.
26-028-24-13-0047 6415 - 15th Ave. So.
26-028-24-13-0049 6407 - 15th Ave. So.
26-028-24-13-0051 6400 - 15th Ave. So.
26-028-24-13-0079 6518 - 15th Ave. So.
26-028-24-13-0102 6538 Bloomington Ave. So.
26-028-24-13-0115 6501 - 15th Ave. So.
26-028-24-14-0096 6401 Bloomington Ave. So.
26-028-24-14-0116 6507 Bloomington Ave. So.
27-028-24-42-0068 6612 - 2nd Ave. So.
33-028-24-42-0014 7435 Emerson Ave. So.
34-028-24-11-0079 7039 - 5th Ave. So.
• 34-028-24-12-0085 7129 - lst Ave. So.
34-028-24-13-0094 7216 - 1st Ave. So.
34-028-24-14-0041 7320 - 5th Ave. So.
The tax increment district budget includes acquisition costs
for subsidy purposes which will be offered to developers as
development incentives.
G. Estimate of Costs
The estimate of public cost s associated with the tax
increment district are outlined _
in the budget listed in Appendix
D.
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H. Estimated Amount of Obligated Funds
At the current time, approximately S1 million is available to
implement this program. Repayment of these funds will be through
the use of tax increment financing and other sources of revenue
available to the HRA and City.
An estimate of the amount of bonded indebtedness for
redevelopment is expected to be S0. 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 S0.
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. land Sec.
469.177, subd. 1, the Original Net Tax Capacity (OTC) for TIF
District "A-1" is based on the January 2, 1990 assessed value
placed on the property by the county assessor. The OTC for the
district is $17,730. (See Appendix 8, Property Located in Tax
Increment Financing District "A-1".) 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.
r
-22-
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
$849 to $1,677 per home. The total CTC for 19 new homes within
the project area ranges from $16,131 to $31,863. As a result of
the improvements to be constructed, it is expected that the
estimated captured net tax capacity will be available for the
housing program. It is also anticipated that this amount will be
captured not more than 25 years. (See Appendix C, Estimate of
Tax Increments).
L. Duration of the District
Pursuant to Minn. Stat., Sect. 469.176, subd. 1, the maximum
duration of a redevelopment tax increment district is 25 years.
The HRA elects to capture 100$ 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
Minn. Stat., Sec.
• certification was
shall be used to
which exceed ten
with Minn. Stat., Sec. 469.174, subd. 14, and
469.176, subd. 3, for districts for which
requested after June 30, 1982, no tax increment
pay any administrative expenses for a project
percent of the total tax increment expenditures
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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..., n_o
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
eparcel 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.
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• Pursuant to Minn. Stat., Sec. 469.176, subd. 4~, 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
-25-
increment financing budget listed in Appendix D, or which is in a
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
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. are actually paid to a third party with
respect to the activity;
(2) bonds, the proceeds of which must be used
td 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
(s), 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
-27-
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
-28-
may be expended on activities located outside of the
district, (ii) fore-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 "Expanded New Home - Scattered Site
Housing Program: Blight Qualification Survey"
which will be on file at City Hall 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
-29-
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
prospective developers 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, prospective developers 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 an expanded New Home
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.
•
-30-
DRAFT 6/13/90
APPENDICES
EXPANDED NEW HOME - SCATTERED SITE
HOUSING PROGRAM
REDEVELOPMENT PRO3ECT AREA "A"
- AND
TAX INCREMENT FINANCING DISTRICT "A-1"
•
-31-
•
•
_32'
_ o
m m m m N f
OIL - _ p D l0 WOi P ~ ~
~ v.=i y <
P -~ H. ti
' %ERx ES AVE (~~ -- ~ I - ~ ~ %ER%ES AVE.
WASH BURN ji ~~ ""'". ~ ._ ~ ll ~' ~ i i I - rr~ ) _--- ~L 1(." ~I ~ ~ I ~IL_ .~~II WasHauRN ..
1' ~~~ ~~ JI \~~ ~~ 'I I 1C. )~ ~1 jf ] ~~ Ji _-~ 1 VINOENT
^ UPTON ~ - UPTON
V~NLEN, I ~_~~ 1 _-ll ~~I ~I~ 1~-=iii ~~~H~-_~( ~ ~I 11 _~ I ~ 1L=_- i~
SJ 1~I~1 I ~_ ,gin r THOMAS
6 SHER DAN I ! ~ l-~~ - -I-- '_~I - ~ ~ 1. M, ~~~~t, .._ '_'I ~I .~_~/-. l~lt._ __. _I ~. S MERIDAN
m RU SS_ELL I' I F- -_.. di - __- ~ b; ~. -. - ~~~.. RUSSELL
r
~ QUEEN i~, _ ~ ~ QUEEN
L I I_- J11~ ~1 I (~ I ( r l
rn. PENN .AVE ~i ~--~~ I ~~: ~ll ~l -_ _. ~ ~.~~.~~~ ~~ l~ ~I i7 ~I .~II~ PENN AVE .
' Z -OItVER ~~ - "-- -' ~ ~ OLIVER
ir_ ~_ r- Iy.~~ l
~ NEw'TOty II~- ~r ~`_ "~~` ~.-~i ~. _~l ~11L -_..~~~i .I fIf __ II :_ JI~ _ llIII __1I L.. ~ - NEWTON
STzvJ I ~1 ~~_- J r,A IJ _ J~~ ~j~ )r ~L~ 1/If IL __J1 ~1f~_~~._ '. MORGAN
i MOOGAN I I~ __J ~~ =~L• ~l l~(g~u-1. II III ~L -J~~~'~~~1rL _ ~ LOGAN
~ f ~ ~~~
1~ _J ~ .~~ J ~~~i..l ~~~' I__ J~~~~- JI KNOX
I r ~ ~ J
D J4MOEE II _._ .. l~ L~ _~,~C~L ~~._~l ~~~ ~~~I~ J(~~~I _7___l(~~~~L____ 1 JAME$
R1 -IRVING II /~ ~ ~~ ~~. ~ .. .,-~~J ,:. -~ ~_ ~~ .1T--- ~L__._~~~~ "~~ i IRVING
N f .I - _ ___ 351___-' ! nK~[SNgaEI. oarvF I !__JL~~~ I HUMBOLDT
HUM BOLDT ~ ~-- I
n ~ I GIRARO
` P--,.- 1r- ~C-7L~~J/
~ fREMONT ~ . _- ~~ ~ A~,i'r"~•'~e--. _ _ __ ~-=.~~~_ r PREMONT
O EMERSON - ~~ ~~ ~-~ r F `C ~ '~_-~~~~ 'l~ ~ ~ '1 EMERSON
_ -DUPON7 ~ ,, ~ o ~~ ~c~e~ / n ~ DU P,ON 7.. -~
BRYANT 1 ~a lj~~~~~\~~\ 1~ r1,` o ~~~i ~•BRYANT
i
PPP ~ U L-~ ~ I : /~ `~~ ~ / ~/~ I~ I\t l l Z
ALDRICM ~ _ 3~ m; ~~'" ~ ~ -~i I~~ AL DRICH D.
~ \
LYN DALE AVE ~~... 1 ~ LY NDA LE AVE
GARFIE LD I ~~ ~ ~[~ r~''~JJ1 ~~h J ,~~ ~ ~~~ GARFIELD
HARRIET ~_ ~~ _ i_J ~.L~_~ JL~J'~_' l `- ~~\ (-.~>~ T / ~^~~~ I HARRIET C m
GRAND II u ~ ~ ~~].~ IIUIiU - ICJ (~~~ ~~~II.I .GRAND. ~_ ~-
~~_ ~_ _~. _ . ~._ !' ~~~ ._ _~ ~_ _ L _lO ~~_ _ _ ~~_ Iii PLEASANT ~ "T.
PLEASANT -- - - - rrI - - ~~ ~ i
PILLSBURY `~i ~ ~ ~ ~^~~ ~~. I~~~ ~0~. ~ PILLSBURY ~~ 0..
WENTWORTH`~~ ~ ~~~ ~, ~LJ I J~~li' WENT WORTH ~. m _
- ~ BL AIG DELL LI~~ .~~~~ '~ ~ , ~ ~~ I I. BL AISDELL (.Q~ ~
-N ICOLLET 4VE ~~, ~ -`~~~~~~0`~~-- ~~~~ ~~ j`~' NICOLLET AVE ~~"
X ~~ ~~ ~~L _J:~1~.1 ~, CJ L-J~ ~ S7EVEN5 ~_ ~~ .. ~.
STEVENS
2r,d -~ o ~or~~~c:~ ~ o ~ X00 ~~ 2nE --
~ 3rd : CD f~~I~~O~CI - OO~~ , 3r4 ,m
m CIIN TON ~ ~~~~~~~~~
~ ~4.Ih. rl~- I ~~L1~~~.~ ~~ LJ~~~ 41hNTON.
~~ ~ ~~~ Q ~~J~' ~~~ s,h ~
SI PORTLAND AV Eh ~'I`1~`-~~ ~0~ I ' ~~~r~~~ ~ ~I~ PORTLAND AVE. m
OAKLAND I~I 0.--' - ~OOC~ ~ ~ -' I J I_)II:. ~ OAK L4ND
N PARK I i~~~-~~~~~i~ 0~~~~ 1-. PARK
,D COLUMBUS '-'~~ - m i COLUMBUS
CHICAGO i~~l,-,~~~~- ~~0~~~ n ~ I CHICAGO..
(~ " o
~ III -COO ~~~L_-~I ~I ~ m z~ ELL10T
;~ Ih III moo 00 ~~~~ I,,~
~3,~ ~~,~11~JOOj -~~nOCJ[~~rOOO~O 13;h
141h I~~~~ _ ~~~_ ~~OOL_~~~~ IS Ih
_ CIS Ih ~ I` I~~C~ \~r ~I~ ~~ ~~~~ BLOOMINGTON
BLOOMINGTON - r~~~~, JJJJ
'~r ~~~~ ~~ ~ ~~~C-~]C~~~Q-']C~~ l `~ 16,1,
1711,
i C~~Jr~J~C- 1 -
CEDAR LAVE ' ~E -~1 ~~ _._ 1r'-=JI.~JO~OOL-)t,..L CEDAR AVE.
LONGFELiOw - -- ~- ---=~_ ..d --..-~IIIE.-_,I~~~'-`-T-~~I~-- -'-- LONGFEiLOw
~m ~m ~ L J N V~ I,. J~I~
_ - - - ~ ~ ~~~ zoln
m
z zl t1
m
ZCi in r- 22 ne
V ~ (l~I ~~~r~ ~I~7_~ STA NDISH
C .-. O
tp m tP W
-C Cr A N
APPENDIX B
PROPERTY LOCATED IN
TAX INCREMENT FINANCING DISTRICT "A-1"
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. S 1,506
26-028-24-12-0087 6349 - 14th Ave. So. S 1,458
26-028-24-12-0114 6325 - 15th Ave. So. S 1,611
26-028-24-13-0046 6425 - 15th Ave. So. S 1,347
26-028-24-13-0047 6415 - 15th Ave. So. $ 520
26-028-24-13-0049 6407 - 15th Ave. So. S 541
26-028-24-13-0051 6400 - 15th Ave. So. S 513
26-028-24-13-0079 6518 - 15th Ave. So. S 1,362
26
028
24
13
0
02
-
-
-
-
1 6538 Bloomington Ave. So. $ 501
26-028-24-13-0115 6501 - 15th Ave. So. $ 444
26-028-24-14-0096 6401 Bloomington Ave. So. S 466
26-028-24-14-0116 6507 Bloomington Ave. So. $ 541
27-028-24-42-0068 6612 - 2nd Ave. So. $ 519
33-028-24-42-0014 7435 Emerson Ave. So. S 469
34-028-24-11-0079 7039 - 5th Ave. So. $ 528
34-028-24-12-0085 7129 - 1st Ave. So. $ 1,602
34-028-24-13-0094 7216 - 1st Ave. So. S 1,584
34-028-24-14-0041 7320 - 5th Ave. So. S 1.671
Total S 17,730
*Original Net Tax Capacity for taxes payable in 1990.
-35-
' APPENDIX C
ESTIMATE OF TAX INCREMENTS
FOR
• TAX INCREMENT FINANCING DISTRICT "A-1"
....... RANGE .. .....
A. VALUE OF NEW CONSTRUCTION Per Home Per Home
Construction Cost (Land & Bldg) 5110,000 $140,000
x Sales Ratio 92.00$ 92.00$
Estimated Market Value $101,200 5128,800
B. TAX INCREMENT VALUE
Estimated Market Value 5101,200 $128,800
x Tax Capacity Ratio
(Class lA; Prop. Type R-Hmstd)
1.00$ $68,000 $ 680 $ 680
2.00$ $32,000 640 640
3.00$ Balance 36 864
New Tax Capacity S 1,356 S 2,184
- Original Net Tax Capacity (Avg.)
- (507)
-------- - (507)
----
Captured Net Tax Capacity
$ 849 ----
$ 1,677
x Tax Capacity Rate (1990) 102.964$ 102.964$
Annual Tax .Increment $ 874 S 1,727
x 19 Homes S 16,609 $ 32,807
C. ESTIMATE OF NET AD VALOREM PROPERTY TAXES
Estimated Market Value . 5101,200 5128,800
x Tax Capacity Ratio
(Class lA; Prop. Type R-Hmstd)
1.00$ 568,000 $ 680 $ 680
2.00$ $32,000 $ 640 $ 640
3.00$ Balance S 36 $ 864
New Tax Capacity S 1,356 S 2,184
x Tax Capacity Rate 102.964$ 102.964$
-
Net Ad Valorem Taxes (per home) -------- -
S 1,396 --------
S 2,249
x.19 Homes S 26,528 $
42,726
_
-36-
APPENDIX D
BUDGET
TAX INCREMENT FINANCING DISTRICT "A-1"
Property Acquisition (Incl. Appraisals) $ 1,009,393
Demolition/Site Clearance $ 114,950
Legal Expenses $ 16,326
TOTAL GROSS EXPENDITURE $ 1,140,669
•
-37-
APPENDIX E
ESTIMATE OF IMPACTS ON OTHER
TAXING JURISDICTIONS
TAX INCREMENT FINANCING DISTRICT "A-1"
The impact of the use of tax increment tax dollars for
project costs is estimated in Table I for each taxing
jurisdiction. This estimate is based on development activities
discussed in this plan. The figures do not include possible tax
increments derived from changes in tax capacity rates, tax
capacity ratios, or inflation factors.
TABLE I
TIF DIST. TIF DIST.
-- MOST RECENT ORIGINAL WITHIN
TAX CAPACITY NET TAX TAXING
(TAXES 1990) CAPACITY JURISDICTION
TAXING JURISDICTION
City of Richfield S 23,421,750 $ 17,730 0.0757$
Hennepin County 1,034,463,652 17,730 0.0017$
School Distr. #280 33,115,397 17,730 0.0535$
Vo-Tech. School 661,852,490 17,730 0.0027$
Water Shed #3 270,526,740 17,730 0.0066$
Miscellaneous:
Met Council* 51,034,298,323 $ 17,730 0.0017$
Regional Transit Bd. 1,034,298,323 17,730 0.0017$
Mosquito Control 1,011,958,476 17,730 0.0018$
Hennepin Parks 704,425,509 17,730 0.0025$
Regional Railroad 1,034,,463,652 17,730 0.0017$
Park Museum 1,034,463,652 17,730 0.0017$
*Portion within Hennepin County only.
Considering all of the taxing jurisdictions, it can be seen
from Table I above that the city, school, and county districts
will retain 99$ of each respective district available for normal
growth of tax base or valuation.
Applying the percentage of the total tax capacity rate
(taxes payable in 1990) levied by each taxing jurisdiction to the
projected captured tax capacity resulting from the new program ~I
-38-
• reveals the annual use of tax dollars for project costs as it
affects each taxing jurisdiction. Based on the analysis in
Appendix C, Estimate of Tax Increment, Table II represents the
amount of increment which is attributed to each taxing body.
.................................................................
TABLE II
..............RANGE MINIMUM...............
k TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ S 3,316
Hennepin County 27.916 27.1 4,503
School Distr. #280 47.638 46.2 7,685
Vo-Tech. School 1.103 1.1 178
Water. Shed #3 0.120 0.1 19
.- Miscellaneous** 5.631 5.5 908
Total 102.964$ 100.0$ $16,609
..............RANGE MAXIMUM...............
~ TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ $ 6,550
Hennepin County 27.916 27.1 8,895
-• School Distr. #280 47.638 46.2 15,179
Vo-Tech. School 1.103 1.1 351
Water Shed #3 0.120 0.1 38
Miscellaneous** 5.631 5.5 1,794
Total 102.964$ 100.0$ $32,807
The tax increments derived from prospective development in
the tax increment district would not be available to any of the
taxing jurisdictions were it not for public intervention by the
HRA. The increase in tax capacity value due to development will
be delayed for application to the tax capacity rate levy for the
duration of the tax increment district. This new tax capacity
value could eventually permit a levy decrease. If it could be
assumed that the captured tax capacity was available for each
taxing jurisdiction, the use of tax dollars for project costs
-39-
represented as tax increments may be determined. This
determination is facilitated by estimating how much the levy for
property outside of the tax increment district would have to be
adjusted to compensate for the temporary use of new development
tax dollars in each taxing jurisdiction.
Table III represents the additional tax capacity rate that
would be required to be levied by each taxing jurisdiction to
compensate for the use of the project's tax increment tax dollars
for project costs.
TABLE III
..............MINIMUM IMPACT ..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,404,020 0.142 $ 3,316
Hennepin County 1,034,445,922 0.004 4,503
School Distr. #280 33,097,667 0.232 7,685
Vo-Tech. School 661,834,760 0.000 178
Water Shed #3 270,509,010 0.000 19
Miscellaneous** 1,034,445,922 0.001 908
..............MAXIMUM IMPACT..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,404,020 0.280 $ 6,550
Hennepin County 1,034,445,922 0.009 8,895
School Distr. #280 33,097,667 0.459 15,179
Vo-Tech. School 661,834,760 0.001 351
Water Shed #3 270,509,010 0.000 38
Miscellaneous** 1,034,445,922 0.002 1,794
*Tax increment district tax capacity value subtracted from
taxing jurisdiction tax capacity.
**Miscellaneous value based on Hennepin County tax capacity.
-40-
• DRAFT 6/13/90
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR
THE CITY OF RICHFIELD, MINNESOTA
REDEVELOPMENT PLAN
FOR
REDEVELOPMENT PROJECT AREA "B"
AND
TAX INCREMENT FINANCING PLAN
FOR
- TAX INCREMENT REDEVLOPMENT DISTRICT "B-1•'
•
OF THE
EXPANDED NEW HOME - SCATTERED SITE
HOUSING PROGRAM
DATED: 1990
_________________________________________________________________
PREPARED BY:
The City of Richfield
Department of Community Development
Housing and Redevelopment Division
6700 Portland Avenue South
Richfield, MN 55423
(612) 861-9760
-41-
•
•
-42-
• TABLE OF CONTENTS
Part I.
Redevelopment Plan
for
Redevelopment Project Area "B"
PAGE
A. Statement of Public Purpose 45
H. Statutory Authority 45
C. Description of Redevelopment Project Area. 46
D. Statement of Goals and Objectives 47
E. Development Activities and Agreements 48
F. Proposed Land Use 50
G. Acquisition and Relocation Activities 50
H. Environmental Considerations 51
I. Redevelopment Plan Modification. 51
J. Administration of Redevelopment Project 51
Part II.
Tax Increment Financing Plan
for
Tax Increment Redevelopment District "B-1"
A. Statutory Authority 52
B. Statement of Objectives 52
C. Development Program 52
D. Description of Property in the
Tax Increment Financing District 53
E. 1
C assification of the Tax Incr m n
e e t
Financing District 53
F. Parcels In Acquisition 55
G. Estimate of Costs ": 55
H. Estimated Amount of. Obligated Funds.
-43-
I. Sources of Revenue 55
J. Original Tax Capacity 56
K. Estimated Captured Tax Capacity 56
L. Duration of the District 56
M. Estimated Impact on Other Taxing Jurisdictions. 56
N. Modifications of the Tax Increment
Financing District 57
O. Limitation on Administrative Expenses 57
P. Limitation on Duration of Tax Increment
Financing Districts 57
Q. Limitation on Qualification of Property in
Increment District not Subject to Improvement. 57
R. Limitation of the Use of Tax Increment 58
S. Notification of Prior Planned Improvements 58
T. Excess Tax Increments 59
U. Restrictions on Pooling; Five-Year Limit. 59
V. Assessment Agreements 61
W. Administration of the Tax Increment Financing District
and Maintenance of the Tax Increment Account 61
X. Annual Disclosure Requirements. 62
Y. Assumptions 62
Z. Municipal Findings 62
Appendix A: Map: Redevelopment Project Area "B". 67
Appendix B: Property in the Tax Increment
Redevelopment District "B-1" 69
Appendix C: Estimate of Tax Increments. 70
Appendix D: Tax Increment Financing Budget. 71
Appendix E: Estimate of Impacts on Other
Taxing Jurisdictions ~. 72
•
•
•
-44-
• Draft.6/13/90
PART I.
REDEVELOPMENT PLAN
FOR
REDEVELOPMENT PROJECT AREA "B"
A. Statement of Public Purpose
Lt is found that there is not in this city a sufficient
supply of adequate-safe and sanitary dwelling accommodations;
that in certain areas thereof there exist substandard conditions,
unsafe-and unsanitary housing and buildings and structures used
or intended to be used for living; which by reason of
sociological and technological changes, dilapidation,
obsolescence, overcrowding,. and faulty arrangement or design of
building and improvements, lack of public facilities,
ventilation, light and sanitary facilities, or deleterious land
use, or obsolete layout, or any combination of these and other
factors are injurious to the health, safety, morals :and welfare
of the citizens of this state; cause an increase and spread of
crime, juvenile delinquency and disease, inflict blight upon the
economic value of large areas; threaten the source of public
revenues while decentralizing communities to areas improperly
planned and not related to public facilities; and require many
citizens to occupy unsafe, unsanitary and overcrowded dwellings.
Therefore, in order to respond to public interest and protect.
the overall economic stability of the housing area, redevlopment
of neighborhoods is required to create an economic environment
which fosters the growth of a healthy residential base and
encourages private enterprise to engage in redevelopment and new
construction to be implemented in accordance with a comprehensive
community plan. The Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota (HRA) and the City Council
of the City of Richfield, Minnesota (City) have determined that
public intervention is necessary in Redevelopment Project Area
"A" (Project Area "B") of the Expanded New Home - Scattered Site
•• Housing Program (Housing Program) in order to achieve goals and
objectives for the area.
H. Statutory Authority
The statutory authority for the undertaking of a
redevelopment project in Project Area "B" and the activities
proposed in the redevelopment plan relating thereto is conferred
upon the HRA pursuant to and in accordance with the Housing and
Redevelopment Authorities Act, Minn. Stat., Sec. 469.001 to
469.047, inclusive, as amended. Specifically, Minn. Stat., Sec..
469.027 establishes the requirements for redevelopment plan
preparation by an HRA prior to undertaking property acquisition,
redevelopment, development and other related improvements.
-45-
C. Description of the Redevelopment Project Area •
-In order to guide development and redevelopment in Project
Area "B", the HRA has created this redevelopment plan. Pursuant
to Minn. Stat., Sec. 4b9.002, subd. 12, the proposed project.
meets the definition of a redevelopment project, defined in Minn.
Stat., Sec. 469.002, subd. 14, and will henceforth, be referred
to as the redevelopment project. The boundary for Project Area
"B" encompasses all that real property within an area described
as follows:
Beginning at the intersection of the southerly right-of-way
line of State Highway, No. 62 and .the easterly right-of-way
line of Oliver Avenue South, thence in a line easterly more
or less, along said southerly right-of-way line to its '
intersection with the westerly right-of-way line of Lyndale
Avenue South. Thence, southerly along said westerly right-
of-way line to its intersection with the southerly right-
of-way ine of West 63rd Street. .Thence, westerly along
said. southerly right-of-way line to its intersection with
the westerly right-of-way line of Aldrich Avenue South.
Thence, southerly along said westerly right-of-way line to
it intersection with the southerly property line of Lot 4,
Hlock, 2, Ray's Lynnhurst Second Addition. Thence,
westerly along said southerly property line, as extended to
its intersection with the easterly property line of Lot 9, .
Block 2,_Ray's Lynnhurst Second Addition. Thence,
southerly along said easterly property line, as extended,
to its intersection with the southerly property line of Lot
5, Block 2, Ray's Lynnhurst. Second Addition. Thence,
westerly along said southerly property line, as extended,
to its intersection with the southerly right-of-way line of
Mildred Drive. Thence., westerly more. or less, along said
southerly right-of-way line to its intersection with the
easterly right-of-way line of Emerson Avenue South.
Thence, southerly along said easterly right-of-way line to
its intersection with the northerly property line of Lot A,
Silverwood Second Addition. Thence, easterly along said
northerly property line, as extended, to its intersection
with the easterly property line of Lot A, Silverwood Second
Addition.. Thence, southerly-along said easterly property
line, as extended, to its intersection with the southerly
right-of-way line of West 66th Street. Thence, westerly
along said southerly right-of-way line to its intersection
with the. westerly right-of-way line of Humboldt Avenue
South. Thence, southerly along said westerly right-of-way
line to .its intersection with the northerly right-of-way
line of West 69th Street. Thence, westerly along said
northerly right-of-way line to its intersection with the
westerly right-of-way line of Irving Avenue South. Thence,
southerly along said westerly right-of-way line to its
intersection with the southerly right-of-way line of West
72nd Street. Thence, easterly along said .southerly right-
of-way line to its intersection with the westerly right-of-
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• way line of Humboldt Avenue South.. .Thence,. southerly along
said westerly right-of=way line to `its intersection with
the northerly right-of-way line of West 73rd Street.
Thence, westerly along said northerly right-of-way line to
its intersection with the westerly right-of-way line of
Penn Avenue South. Thence, southerly along said westerly
right-of-way line to its intersection with the northerly
right-of-way line of West 74th Street. Thence, westerly
along said northerly right-of-way line to its intersection
with the westerly right-of-way line of Sheridan Avenue
South. Thence, southerly along said westerly right-of-way
line to its intersection with the northerly right-of-way
line of West 76th Street. Thence, westerly along said
northerly right-of-way line to its intersection with the
easterly right-of-way line of Xerxes Avenue South. Thence,
..northerly along said easterly right-of-way line to its
intersection with the southerly right-of-way line of West
66th Street. Thence, easterly along said southerly right-
of-way line to its intersection with the easterly right-of-
way line of Russell Avenue South. Thence, southerly .along
said easterly right-of-way line to its intersection with
the northerly property line of Lot 23, Block 2, Tingdale
Brothers Lincoln Hills. Thence, easterly along said
northerly property line, as extended, to its intersection
- with the easterly property line of Lot 23, Block 2,
Tingdale Brothers Lincoln Hills. Thence, southerly along
said easterly property line, as extended, to it
intersection with the southerly right-of-way line of West
67th Street. Thence, easterly along said southerly right-
of-way line to its intersection with the easterly property
line of Lot 24, Block 16, Tingdale Brothers Lincoln Hills.
Thence, southerly along said easterly property line, as
extended, to its intersection with. the northerly right-of-
way line of West 69th Street. Thence, easterly along said
northerly right-of-way line to its intersection with the
easterly right-of-way line of Penn Avenue South. Thence,
northerly along said easterly right-of-way line to its
intersection with the southerly right-of-way line of West
•~ 68th Street. Thence, easterly along said southerly right-
of-way line to its intersection with the easterly right-of-
way line of Oliver Avenue South. Thence, northerly more of
less, along said easterly right-of-way line, as extended,
to the point of beginning.
(Also refer to Appendix A, Map: Project Area "H".)
D. Statement of Goals and Objectives
The HRA determines that it is necessary, desirable, and in
the public interest to undertake a redevelopment project in the
City pursuant to the provisions of Minn. Stat., Chapter 469, as
amended. The HRA determines that the funding of the necessary
activities and improvements in the redevelopment project area
shall be accomplished through the use of tax increment financing
and other revenue sources available to the HRA and City.
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The following goals and objectives are intended to serve as a •
basis for guiding activities in the redevelopment project area:
1. To develop strategies to encourage development and
redevelopment of single family homes.
2. To maintain a positive environment within the residential
community.
3. To enrich the quality of life for residents through
planning.
4. To recognize the needs of all segments of the populace
through diversity in housing stock which is a major
determinant of the living environment.
5. To achieve a high level of design quality to enhance the
physical environment.
6. To achieve a balanced variety of housing stock
appropriate to the market area.
7: To enhance the residential tax base of .the community.
8. To protect the surrounding residences from the adverse
effects of dilapidation and deterioration.
9. To eliminate unsightly, blighting, deteriorated, and
substandard structures.
10. To provide an expanded range of housing opportunities of
sufficient quality and size through development,
redevelopment and new consttruction.
11. To provide maximum opportunity, consistent with the needs
of the city for development by private enterprise.
12. To coordinate elements of the City's Comprehensive Plan
with these project objectives.
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.
Descrirtion of Anticipated Public Development Activities
The anticipated public development activities in the
redevelopment project area to be undertaken by the HRA 'and City
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• in order to support the private development activities include:
1. Property acquisition;
2. On-site clearance;
3. On-site improvements;
4. Remedial site environmental activities; and
5. 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;
~. On-site improvements;
~ - 4. New construction;
5. Remedial site environmental activities; and
6. Adjacent public improvements and utilities which service
site.
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 the developer. The general
requirements to be imposed upon the developer 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.
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F. Proposed Land Use
The current land uses in the redevelopment project area
include the following:
- Single family residential;
- Apartment;
- Duplex;
- Commercial;
- Parks;
- Vacant; and
- Quasi-public (e.g. churches, cemetery, nursing homes,
private schools, and service organizations).
New uses will be restricted to single family residential.
G. Acquisition and Relocation Activities
1. Acquisition
As a means of comprehensively formulating an expanded New
Home Program, HRA staff recently undertook the following
tasks to identify property for acquisition:
a. Analysis of residential property tax records with
estimated property values less than or equal to
555,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
The following property has been identified .for
acquisition for Cycle I of the program:
PID NUMBER
28-028-24-11-0041
28-028-24-11-0067
28-028-24-12-0046
28-028-24-22-0079
28-028-24-24-0046
ADDRESS
6300 Aldrich Ave. So.
6315 Dupont Ave. So.
6321 Humboldt Ave. So.
6313 Morgan Ave. So.
6424 James Ave. So.
28-028-24-34-0052 6813 Logan Ave. So.
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•
•
33-028-24-21-0078 7145 James Ave. So.
33-028-24-24-0071 7210 James Ave. So.
2. Relocation
The HRA accepts as binding its obligations under
provisions of federal and state law (Minn. Stat., Sec. 117.50
through 117.56) for relocation.
H. Environmental Considerations
Generally, the redevelopment project area is developed. All
proposed .public and private development resulting from this plan
will be evaluated against existing environmental regulations.
I. Redevelopment Plan Modification
All redevelopment plan modifications will be processed in
accordance with Minn. Stat., Sec. 469.029, subd. 6.
J. Administration of Redevelopment Pro3ect
The redevelopment project and related housing program will be
- administered by the Richfield Housing and Redevelopment
Authority.
•
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Draft 6/13/90 - •
TAX INCREMENT FINANCING PLAN
FOR
•TAX INCREMENT REDEVELOPMENT DISTRICT "B-1"
A. Statutory Authority
The statutory authority for the undertaking of a tax
increment financing district (TIF District "8-1") in
Redevelopment Project Area "B" (Project Area "B") for 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.
C. Development Program
1. Description of
On January 16,
staff to proceed w,
Program. In order
initially identify
participation, the
Development Activities
1990, the HRA adopted a motion directing
ith the formulation of an expanded New Home
to gauge interest in the new program and
residential property for program
following tasks were undertaken:
a. Analysis of residential property tax records with
estimated property values less than or equal to
$55,000;
b. Survey residential property owners to gauge interest
in the new program and identify potential sellers and
time frame for voluntary acquisition;
c. Evaluation of survey results including identification
of sellers indicating desire for immediate program
participation and voluntary sale of property; and
d. Evaluation of properties for program eligibility.
A comprehensive, integrated approach for acquisition,
site clearance, and new construction has been formulated and
will be provided through program guidelines. The HRA will
assist prospective developers with development,
redevelopment, new construction, and other related activities
within the context of this Plan, the Redevelopment Plan and
other related guidelines.
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2. Development Actf.vities Covered by Contract
Currently, there are no development contracts.
3. Other Development Not Under Contract Reasonably Expected
to Occur in the Proiect.
Proposals from prospective developers will be required to
be submitted to the HRA as part of the review process. The
following activities may be expected to occur:
1. Property Acquisition;
2. On-site clearance;
3. On-site. improvements;
4. New construction;
5. Remedial site environmental activities; and
6. Adjacent public improvements and utilities which
service site.
- For Cycle I of the Housing Program, a total of 27
properties have been identified for program participation and
acquisition. Nineteen of the properties are located within
Redevelopment Project Area "A" while the remaining eight are
within Redevelopment Project Area "B". (Refer to Appendix A
for map of Redevelopment Project Areas.) Redevelopment
Project Area H contains two properties with double lots. With
property subdivisions, two additional homes will be
constructed. Initial construction for Cycle I is anticipated
to begin toward the end of the last quarter of calendar year
1990, with construction for each home to run 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-1" is identified in
Appendix H.
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
the district to be established within Project Area "B" is a
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redevelopment tax increment financing district as defined in
Minn. Stat., Sec. 469.174, subd. 10:
It has been ascertained 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.
""Structurally substandard" shall mean containing
defects in structural elements or a combination of
deficiencies in essential utilities and facilities,
light and ventilation, fire protection including
adequate. egress, layout and condition of interior
partitions, or similar factors, which defects or
deficiencies are of sufficient total significance to
justify substantial renovation or clearance."
"A building is not structurally substandard if it is in
compliance with the building code applicable to new
buildings or could be modified to satisfy the building
'code at a cost of less than 15 percent of the cost of
constructing a new structure of the same square footage
and type on the site. The municipality may find that a
building is not disqualified as structurally
substandard under the preceding sentence on the basis
of reasonably available evidence, such as the size,
type, and age of the building, the average cost of
plumbing, electrical, or structural repairs, or other
similar reliable evidence. If the evidence supports a
reasonable conclusion that the building is not
disqualified as structurally substandard, the
municipality may make such a determination without an
interior inspection or an independent expert appraisal
of the cost of repair and rehabilitation of the
building."
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 "Expanded New Home - Scattered Site
Housing Program: Blight Qualification Survey" which will be on
file at City Hall for the duration of the tax increment
district's life.
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•
•
F. Parcels in Acquisition
The following property has been identified for acquisition:
PIN NUMBER
28-028-24-11-0041
28-028-24-11-0067
28-.028-24-12-0046
28-028-24-22-0079
28-028-24-24-0046
28-028-24-34-0052
33-028-24-21-0078
33-028-24-24-0071
ADDRESS
6300 Aldrich Ave. So.
6315 Dupont Ave. So.
6321 Humboldt Ave. So.
6313 Morgan Ave. So.
6424 James Ave. So.
6813 Logan Ave. So.
7145 James Ave. So.
7210 James Ave. So.
The tax increment district budget includes acquisition costs
for subsidy purposes which will be offered to developers 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, approximately $1 million is available to
implement this program. Repayment of these funds will be through
the use of tax increment financing and other sources of revenue
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.
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.
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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-1" is based on the January 2, 1990 assessed value
placed on the property by the county assessor. The OTC for the
district is 56,415. (See Appendix B, Property Located in Tax
Increment Financing District "B-1".) 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
5931 to 51,759 per home. The total CTC for ten new homes within
the project area ranges from $9,310 to 517,590. As a result of
the improvements to be constructed, it is expected that the
estimated captured net tax capacity will be available for the
housing program. It is also anticipated that this amount will be
captured not more than 25 years. (See Appendix C, Estimate of
Tax Increments).
L. Duration of the District
Pursuant to Minn. Stat., Sect. 469.176, subd. 1, the maximum
duration of a redevelopment tax increment district is 25 years.
The HRA elects to capture 100$ 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.
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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.
O. 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 a an administrative ex enses fora ro ect
P Y Y P P j
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, 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
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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.
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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 laans; 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 air 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 land,
site preparation, soils correction, removal of hazardous waster
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,
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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 #inance 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.
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(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 the developer 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.
-61-
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
-62-
• 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. Zt 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 "Expanded New Home - Scattered Site
• Housing Program: Blight Qualification Survey"
which will be on file at City Hall 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
prospective developers could not construct the
aforementioned improvements; and without the use of
tax increments or other revenues authorized by this
plan to with the financing of the activities,
prospective developers 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 an expanded New Home
Program for the development, redevelopment, new
construction and other related improvements of
residential homes for which there is limited
• sources of revenue available. ~~~
-63-
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.
•
-64-
• DRAFT 6/13/90
APPENDICES
EXPANDED NEW HOME - SCATTERED SITE
HOUSING PROGRAM
REDEVELOPMENT PROJECT AREA "B"
AND
TAX INCREMENT FINANCING DISTRICT "B-1"
•
•
-65-
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APPENDIX B
PROPERTY LOCATED IN
TAX INCREMENT FINANCING DISTRICT "B-1"
ORI GINAL NET
PIN NUMBER ADDRESS TAX CAPACITY*
28-02.8-24-11-0041 6300 Aldrich Ave. So. S '518
28-028-24-11-0067 6315 Dupont Ave. So. $ 511
28-028-24-12-0046 6321 Humboldt Ave. So. $ 1,443
28-028-24-22-0079 6313 Morgan Ave. So. $ 459
28-028-24-24-0046 6424 James Ave. So. S 524
28-028-24-34-0052 6813 Logan Ave. So. $ 666
33-028-24-21-0078 7145 James Ave. So. S 1,800
33-028-24-24-0071 7210 James Ave. So. S 494
Total $ 6,415
•
*Original Net Tax Capacity for taxes payable in 1990.
-69-
• APPENDIX C
ESTIMATE OF TAX IN CREMENTS
FOR
• TAX INCREMENT FINANCING DISTRICT "B-1"
....... RANGE .. .....
A. VALUE OF NEW CONSTRUCTION Per Home Per Home
Construction Cost (Land & Bldg) $110,000 5140,000
x Sales Ratio 92.00$ 92.00$
-
Estimated Market Value -------- -
5101,200 --------
5128,800
B. TAX INCREMENT VALUE
Estimated Market Value 5101,200 5128,800
x Tax Capacity Ratio
(Class lA; Prop. Type R-Hmstd)
1.00$ 568,000 S 680 $ 680
- 2.00$ .$32,000 640 640
3.00$ Balance 36 864
New Tax Capacity
- Original Net Tax Capacity (Av
) S 1,356
(425) S 2,184
(425) •
g.
- --------
Captured Net Tax Capacity -
S 931 --------
$ 1,759
x Tax Capacity Rate (1990) 102.964$ 102.964$
Annual Tax Increment S 959 S 1,811
x 10 Homes S 9,586 S 18,111
C. ESTIMATE OF NET AD VALOREM PROPERTY TAXES
Estimated Market Value $101,200 . 5128,800
x Tax Capacity Ratio
(Class lA; Prop. Type R-Hmstd)
1.00$ $68,000 S 680 $ 680
2.00$ $32,000 $ 640 $ 640
3.00$ Balance S 36 $ 864
-
New Tax Capacity -------- -
S 1,356 --------
S 2,184
x Tax Capacity Rate 102.964$ 102.964$
-
Net Ad Valorem Taxes (per home) -------- -
S 1,396 --------
S 2,249
x 10 Homes $ 13,960 S 22,490
-70-
APPENDIX D
BUDGET
TAX INCREMENT FINANCING DISTRICT "B-1"
Property Acquisition (Incl. Appraisals) S 425,007
Demolition/Site Clearance S 48,400
Legal Expenses S 6,874
TOTAL GROSS EXPENDITURE $ 480,281
•
-71-
APPENDIX E
ESTIMATE OF IMPACTS ON OTHER
TAXING JURISDICTIONS
TAX INCREMENT FINANCING DISTRICT "B-1"
The impact of the use of tax increment tax dollars for
project costs is estimated in Table I for each taxing
jurisdiction. This estimate is based on development activities
discussed in this plan. The figures do not include possible tax
increments derived from changes in tax capacity rates, tax
capacity ratios, or inflation factors.
TABLE I
TIF DIST. TIF DIST.
MOST RECENT ORIGINAL WITHIN
-- TAX CAPACITY NET TAX TAXING
(TAXES 1990) CAPACITY JURISDICTION
_ TAXING JURISDICTION
City of Richfield $ 23,421,750 $ 6,415 0.0274$
Hennepin County 1,034,463,652 6,415 0.0006$
School Distr. #280 33,115,397 6,415 0.0194$
Vo-Tech. School 661,852,490 6,415 0.0010$
Water Shed #3 270,526,740 6,415 0.0024$
Miscellaneous:
Met Council* $1,034,298,323 $ 6,415 0.0006$
Regional Transit Bd. 1,034,298,323 ~ 6,415 0.0006$
Mosquito Control 1,011,958,476 6,415 0.0006$
Hennepin Parks 704,425,509 6,415 0.0009$
Regional Railroad 1,034,463,652 6,415 0.0006$
Park Museum 1,034,463,652 6,415 0.0006$
*Portion within Hennepin County only.
Considering all of the taxing jurisdictions, it can be seen
from Table I above that the city, school, and county districts
will retain 99$ of each respective district available for normal
growth of tax base or valuation. .
Applying the percentage of the total tax capacity rate
(taxes payable in 1990) levied by each taxing jurisdiction to the
projected captured tax capacity resulting from the new program •
-72-
• reveals the annual use of tax dollars for project costs as it
affects each taxing jurisdiction. Based on the. analysis in
Appendix C, Estimate of Tax Increment, Table II represents the
amount of increment which is attributed to each. taxing body.
TABLE II
..............RANGE MINIMUM...............
~ TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ $ 1,914
Hennepin County 27.916 27.1 2,599
School Distr. #280 47.638 46.2- 4,435
Vo-Tech. School 1.103 1.1 103
Water Shed #3 0.120 0.1 11
.- Miscellaneous** 5.631 5.5 524
• Total 102.964$ 100.0$ $ 9,586
..............RANGE MAXIMUM...............
~ TAX TAX INCREMENT
TAX CAPACITY CAPACITY TO WITHIN TAXING
RATE TOTAL RATE JURISDICTION
TAXING JURISDICTION
City of Richfield 20.556$ 20.0$ $ 3,616
Hennepin County 27.916 27.1 4,910
School Distr. #280 47.638 46.2 8,380
Vo-Tech. School 1.103 1.1 194
Water Shed #3 0.120 0.1 21
Miscellaneous** 5.631 5.5 990
Total 102.964$ 100.0$ $18,111
The tax increments derived from prospective development in
the tax increment district would not be available to any of the
taxing jurisdictions were it not for public intervention by the
HRA. The increase in tax capacity value due to development will
be delayed for application to the tax capacity rate levy for the
duration of the tax increment district. This new tax Capacity
value could eventually permit a levy decrease. If it could be
assumed that the captured tax capacity was available for each
taxing ,jurisdiction, the use of tax dollars for project costs
-73-
represented as tax increments may be determined. This .-
determination is facilitated by estimating how much the levy for
property outside of the tax .increment district would have to be
adjusted to compensate for the temporary use of new development
tax dollars in each taxing jurisdiction.
Table III represents the additional tax capacity rate that
would be required to be levied by each taxing jurisdiction to
compensate for the use of the project's tax increment tax dollars
for project costs.
TABLE III
..............MINIMUM IMPACT..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,415,335 0.082 $ 1,914 •
Hennepin County 1,034,457,237 0.003 2,599
School Distr. #280 33,108,982 0.134 4,435
Vo-Tech. School 661,846,075 0.000 103
Water Shed #3 270,520,325 0.000 11
Miscellaneous** 1,034,457,237 0.001 524
..............MAXIMUM IMPACT..............
ADJUSTED ADJUSTED TAX INCREMENT
TAX CAPACITY TAX CAPACITY WITHIN TAXING
VALUE* RATE JURISDICTION
TAXING JURISDICTION
City of Richfield $ 23,415,335 0.154 $ 3,.616
Hennepin County 1,034,457,237 0.005 4,910
School Distr. #280 33,108,982 0.253 8,380
Vo-Tech. School 661,846,075 0.000 i94
Water Shed #3 270,520,325 0.000 21
Miscellaneous** 1,034,457,237 0.001 990
*Tax increment distr ict tax capacity value subtracted from
taxing jurisdiction tax capacity.
**Miscellaneous value based on Hennepin County tax capacity. •
-74-
FOURTH DRAPT
May 22, 1990
CONTRACT FOR PRIVATE DEVELOPMENT
.Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
1N AND FOR THE CITY OF RICHFIELD, MINNESOTA
and
•
This Instrument Drafted by:
Holmes ~C Graven, Chartered
470 Pillsbury Center
Minneapolis, Minnesota 55402
Telephone: (612)33?-9262
•
•
CONTRACT FOR PRIVATE DEVELOPMENT
THIS AGREEMENT, made and entered into as of this day of
1990, by and between the Housing and Redevelopment Authority in
and for the City of Richfield, a body corporate and politic under the laws of the
state of Minnesota, having its principal office at 6700 Portland Avenue, Richfield,
Minnesota (HRA), and + a
Minnesota having its principal office at
(Developer).
WITNESSETH: WHEREAS, the City of Richfield (City) and the HRA have
created= and established a Redevelopment Project (Project) and Tax Increment
Financing District No. (TIF District) pursuant to the authority granted in
Minnesota Statutes, Sections 469.001 through 469.047 and Sections 469.174
through 469.179; (collectively, the Acts); and
WHEREAS, pursuant to the Aets, the City and the HRA have adopted a
redevelopment plan (Redevelopment Plan) and a tax increment financing plan (TIF
Plan) to finance all or a portion of the public development costs of the Project; and
WHEREAS, in order to achieve the objectives of the Redevelopment Plan
- and TIF Plan as hereinafter defined and particularly to make specified land in the
Project available for development by private enterprise for and in accordance with
the Redevelopment Plan, the HRA has determined to provide substantial aid and
assistance to finance public development costs in the Project; and
WHEREAS, the Developer has proposed a development as hereinafter
defined within the Project which the HRA has determined will promote and carry
out the objectives for which the Project has been undertaken, will assist in e4irrying
out the obligations of the Redevelopment Plan and TIF Plan, will
be in the vital. best interests of the City and the health, safety and welfare of its
residents, and is in accord with the public purposes and provisions of the applicable
state and local laws and requirements under which development in the Project has
been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations of the HRA and the Developer, each party does hereby represent,
covenant and agree with the other as follows:
..ARTICLE I.
DEF1N]TIONS, EXHIBITS, RULES OF INTERPRETATION
Section 1.1. Definitions. In this Agreement, the following terms have the
meanings given below unless the context clearly requires otherwise:
(a) Citv. The City of Richfield, Minnesota.
(b) Construction Plans. Collectively, the plans, drawings and related
documents referred to in Exhibit A.
(c) Developer. , a Minnesota
(d) Development. The Property and the Improvements to be constructed
thereon according to the Construction Plans approved by the HRA.
(e) HRA. The Housing and Redevelopment Authority in and for the City
of Richfield, Minnesota.
(f) Housing and Redevelopment Authorities Act (HRA Act). Minnesota
Statutes Sections 469.001 through 469.047.
(g) Improvements. Each and all of the structures and site improvements
constructed on the Property by the Developer, as specified in the
Construction Plans approved by the HRA.
(h) Mortgage and Holder. The term "mortgage" shall include the
mortgages referenced in Article VI of this Agreement and any deed of trust
or other instrument creating an encumbrance or lien upon the Property or
any part thereof, as security for a loan. The term "holder" in reference to a
mortgage includes any insurer or guarantor (other than the Developer) of
any obligation or condition secured by such mortgage or deed of trust.
2
(i) P
o
t
Th
l
t
l
t
d
i
hi
h
Di
i
per
r
y.
e rea
proper
y
oca
w
e
t
n t
e
str
ct which is
legally described in Exhibit C.
(j) Redevelopment Project (Project). The Redevelopment Project
established by the HRA pursuant to Minnesota Statutes Sections 469.001
through 469.047 and described in the Redevelopment Plan.
(k} Redevelopment Project Plan (Redevelopment Plan). The plan for
implementation. of the Project adapted by the HRA pursuant to Minnesota
Statutes Sections 469.001 through 469.047.
(1) Tax Increment. The tax increment produced by the increase in the
valuation of the Property following certification of the original tax capacity
by the county auditor and construction of the Improvements by the
Developer.
(m) Tax Increment Financing Act (TIF Act). Minnesota Statutes Sections
469.]74 through 469.179.
(n) Tax Increment Financing District (TIF District). TIF District No.
_
created by the HRA pursuant to Minnesota Statutes, Sections 469.174
ti'~rough 469.179 and described in the TIF Plan adopted therefor.
(o) Tax Increment Financing Plan (TIF Plan). The plan for development
of the TIF District adopted by the HRA pursuant to Minnesota Statutes,
Sections 469.174 through 469.179.
(p) Unavoidable Delays. Delays which are the direct result of strikes,
labor troubles, fire or other casualty to the Improvements, litigation
commenced by third parties which results in delays or acts of any federal,
state or local government, except those contemplated by this Agreement,
which are beyond the control of the Developer.
Section 1.2 Exhibits. The following Exhibits are attached to and by
reference made a part of this Agreement:
A. List of Construction Plan Documents
B. Form of Certificate of Completion
C. Legal Description of Property
D. Assessment Agreement and Certification of Assessor
E. List of Structures or Improvements to be Retained
F. Housing Design Criteria
G. License from Developer to HRA
H. Form of Quit Claim Deed
Section 1.3 Rules of Interpretation.
(e) This Agreement shall be interpreted in accordance with and governed
by the laws of the state of Minnesota. ~ '
(b) The words "herein" and "hereof' and words of similar import, without
reference to any particular section or subdivision refer to this Agreement as
a whole rather than any particular section or subdivision hereof.
(c) .References herein to any particular .section or subdivision hereof are
to the section or subdivision of this Agreement as originally executed.
(d) Any titles of the several parts, .articles and sections of this
Agreement are inserted for convenience and reference only and shall be
disregarded in construing or interpreting any of its provisions.
ARTICLE II.
REPRESENTATIONS AND UNDERTAKINGS
Section 2.1 By the Developer. The Developer makes the following
representations and undertakings:
(a) The Developer has the legal authority and power to enter into this
Agreement and has duly authorized the execution, delivery and performance
of this Agreement;
(b) The Developer has the necessary equity capital and will obtain
commitments for financing necessary for construction of the Improvements;
(c) The Developer will construct the Improvements in accordance with
the terms of this Agreement, the Redevelopment Plan, the TIF Plan and all
local, state and federal laws and regulations;
(d) The Developer will obtain, in a timely manner, all required permits,
licenses and approvals, and will meet, in a timely manner, the requirements
of all local, state and federal laws and regulations which must be obtained
or met before the Improvements may be constructed; and
(e) The -plans for the Improvements have been prepared by an
architectural designer; and
(f) The Improvements will have a market value of at least S
upon completion by the Developer.
Section 2.2 Hv the HRA. The HRA makes the following representations as
the basis for the undertaking on its part herein contained:
(a) The HRA is authorized by law to enter into this Agreement and to
carry out its obligations hereunder; and
(b) The HRA will, in a timely manner, subject to all notification
requirements, review and act upon all submittals and applieatlons of the
4
r
Developer and .will cooperate with the. efforts of Developer to secure the
granting of any permit, license, or other approval required to allow the
construction of the Improvements; provided, however, that nothing con-
tained in this subparagraph 2.2(b) shall be construed to limit in any way the
reasonable and legitimate. exercise of the HRA's discretion in considering
any submittal or application.
ARTICLE III.
ACQUISITION OF PROPERTY; CONVEYANCE TO DEVELOPER
Section 3.1. Acquisition of Property and Demolition of Structures. The
HRA has or will acquire the .Property. After acquisition, the HRA shall demolish
all structures and other improvements on the Property, except such improvements
as the Developer and HRA agree shall be retained and used in connection with the
Developement. The structures, improvements or landscaping to be retained and
conveyed to the Developer with the Property are listed in Exhibit E. With the
exception of the structures, improvements and landscaping listed in Exhibit E, the
HRA shall clear the Property and shall leave the site ready for construction. In
order to allow the HRA and its contractors access to the Property, the Developer
shall grant the HRA a license to perform demolition work on the site. The license
shall be in the form of Exhibit G.
Section 3.2. Conveyance to Developer. After acquisition of the Property,
-• the HRA agrees to sell to the Developer and the Developer agrees to purchase
from the HRA the Property for S The HRA shall convey the
Property to the Developer by Quit Claim deed in the general form of Exhibit H.
Section 3.3. Closin Closing on the Property shall take place on or before
or such other date as may be agreed to by the parties in
writing. The HRA shall close on its acquisition of the Property from the original
owner on the same day as it conveys the Froperty to the Developer. __
5
. Section 3.4. Taxes and Special Assessments. The Developer shall pay all
real estate taxes and installments on special assessments due and payable on the
Property as they become due during the year of closing and thereafter until the
Property is sold to the home buyer.
Section 3.5. Soil Conditions and Hazardous Wastes. The Developer
acknowledges that the HRA makes no representations or warranties as to the
condition of the soils on the Property, its fitness for construction of the
Improvements or any other purpose for which the Developer may make use of the
Property, or regarding the presence of hazardous wastes, including asbestos, on the
site. The Developer agrees that it will indemnify, defend and hold harmless the
HRA, its governing body members, officers and employees from any claims or
actions arising from the Developer or- from third parties out of the presence, if
any, of hazardous wastes or pollutants on the Property.
ARTICLE IV.
CONSTRUCTION OF IMPROVEMENTS
Section 4.1. Construction of Improvements. The Developer shall construct
the Improvements on the Property in accordance with the Construction Plans and
shall maintain, preserve and keep the Improvements in good repair and condition
until sale of the Property to the home buyer.
Section 4.2. Building Plans. No building permit shall be issued by the City
unless the plans therefore are in conformity with the Construction Plans, the
Redevelopment Flan, the TIF Plan, this Agreement, including the design standards
outlined in Exhibit F, and ell local, state snd federal regulations. The HRA shall,
within 25 days of receipt of building plans submitted in application for a building
permit review such plans to determine whether the foregoing requirements have
6
been met. If the HRA determines such plans to be deficient, it shall notify the
Developer in writing stating the deficiencies and the steps necessary for
correction. Issuance of the building permit by the City shall be a conclusive
determination that the building plans have been approved and shall satisfy the
provisions of this Section 4.2.
Section 4.3 Schedule of Construction. Subject to Unavoidable Delays,
construction of the Improvements shall be commenced on or before ,
and shall be completed prior to
All construction shall be in
conformity with the approved Construction Plans. Periodically during construction
the Developer shall make reports in such detail as may reasonably be requested by
the HRA concerning the actual progress of construction. If at any time prior to
completion of construction the HRA has cause to believe that the Developer will
be unable to complete construction of the Improvements in the time permitted by
this Section 4.3, it may notify the Developer and demand assurances from the
Developer regarding the Developer's construction schedule. If such assurances are
not forthcoming or are deemed by the HRA at its sole discretion to be inadequate,
the HRA may declare this Agreement to be breached by the Developer and may
avail itself of any of the remedies specified in Section 8.2 of this Agreement.
Section 4.4 Certificate of Completion. Promptly after notification by the
Developer of completion of construction of the Improvements, the HRA shall
inspect the construction to determine whether the Improvements have been
completed in accordance with the Construction Plans and the terms of this
Agreement, including the date for the completion thereof. In the event that the
HRA is satisfied with the construction, the HRA shall furnish the Developer with a
Certificate of Completion in the form attached hereto as Exhibit B. Such certifi-
cation , by the HRA shall be s conclusive determination of satisfaction and
7
termination of the agreements and covenants in this Agreement with respect to the
obligation of the Developer to construct the Improvements.
The certification provided for in this Section 4.4 shall be in recordable form.
If the HRA shall refuse or fail to provide certification in accordance with the
provisions of this Section 4.4, the HRA shall- within 15 days of such notification
provide the Developer with a written statement, indicating in adequate detail in
what respects the Developer has failed to complete the Improvements in n
accordance with the provisions of this Agreement, or is otherwise in default, and
what measures or acts will be necessary, in the opinion of the HRA, for the
Developer to take or perform in order to obtain such certification. Prior to the
issuance of a Certificate of Completion, no occupancy of the Improvements shall
be permitted.
Section 4.5 Failure to Construct. In the event that construction of the
Improvements is not commenced and completed as provided in Section 4.3 of this
Agreement, the Developer shall be liable to the HRA for the amount of the HRA's
expenses. as liquidated damages.
As security for the obligations created in this Section 4.5, the Developer
shall deliver to the HRA prior to the issuance of a building permit for the
Improvements, an irrevocable letter of credit (Letter of Credit) in the amount of
_ (to be amount of HRA writedown and cost of demolition site
preparation). The Letter of Credit shall be retained by the HRA until completion
of construction of the Improvements has been certified by the HRA. Upon such
happening the Letter of Credit shall be returned to the Developer and all liability
under this Section 4.5 shall terminate. If at any time prior to the issuance of the
Certificate of Completion, the HRA determines that, for whatever reason, the
issuer of the Letter of Credit will be unable to honor or pay the amount remaining
8
theron, the HRA shall notify the Developer of such determination, and the
Developer shall have 30 days from the date of notification to furnish a new letter
of credit in the amount of the original Letter of Credit less any drafts previously
made against it. If at the time the HRA determines that the issuer of the Letter
of Credit will be unable to honor or pay thereon there remains less than 30 days
prior to the expiration of the Letter of Credit, the Developer will have such period
of time as the HRA determines to be reasonable to furnish a new Letter of Credit.
The provisions of this Section 4.5 shall not be construed to prejudice or limit any
additional rights of the City under Article VIII of this Agreement.
Section 4.6. Right to Collect Delinquent Taxes. The Developer
acknowledges that the HRA is providing substantial aid and assistance in
furtherance of the Project. To that end, the Developer agrees for itself, its
successors and assigns, in addition to the obligation pursuant to statute to pay real
estate taxes, that it is also obligated by reason of this Agreement to pay before
delinquency all real estate taxes assessed against the Property based upon the
minimum market value as stipulated in the Assessment Agreement. The Developer
acknowledges that. this obligation creates a contractual right on behalf of the HRA
to sue the Developer or its. successors and assigns to collect delinquent real estate
taxes and any penalty or interest thereon and to pay over the same . as a tax
payment to the county auditor. In any such suit, the HRA shall also be entitled to
recover its costs, expenses and reasonable attorneys' fees.
ARTICLE V.
INSURANCE
Section 5.1 Insurance. The Developer will provide and maintain or cause
to be provided and maintained at all times during the process of constructing the
•
•
9
Improvements and, from time to time at the request of the HRA, furnish the HRA
with proof of payment of premiums on:
(e) Builder's risk insurance, written on the so-called "Builder's Risk --
Completed Value Basis," in an amount equal to 10096 of the insurable value
of the Improvements at the date of completion, and with coverage available
in nonreporting form on the so-called "all. risk" form of policy;
(b) Comprehensive .general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and
contractual liability insurance) together with an Owner's Contractor's Policy
with limits against bodily injury and property damage of not less than
51,000,000 for each occurrence (to accomplish the above-required limits, an
umbrella excess liability policy may be used); and
(e) Workers' compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (a) and (b) above shall
be in form and content satisfactory to the HRA and shall be placed with financially
sound and reputable insurers licensed to transact business in Minnesota. The policy
of insurance delivered pursuant to clause (e) above shall contain an agreement of
the insurer to give not less than thirty (30) days advance notice to the HRA in the
event of cancellation of such policy or change affecting the coverage thereunder.
Section 5.2. Modification. In order to facilitate obtaining financing for the
construction of the Improvements, the HRA agrees to modify this Article V to
accommodate the interests of the Developer ar the Holder of the First Mortgage;
provided, however, that the HRA determines, in its reasonable judgment, that any
such modification will adequately protect the legitimate interests and security of
the HRA with respect to the Improvements.
ARTICLE VI.
FINANCING
Section 6.1 Financing. Within 15 days of the date of execution of this
Agreement, the Developer shall submit to the HRA evidence of a commitment for
financing for the Improvements in compliance with the provisions of Section 2.1(b)
10
of this. A cement. if the HRA finds that the financing is sufficiently committed
Br
and adequate in amount to provide for the construction of the Improvements, the
HRA shall notify the Developer of its approval.
If the HRA rejects the evidence of mortgage financing as inadequate, the
Developer shall have 30 days or such additional period of time as the Developer
may reasonably require from the. date of such notification to submit evidence of
financing satisfactory to the HRA. If the Developer fails to submit such evidence
or fails to use due diligence in .pursuing financing, the HRA may terminate this
Agreement and both parties shall be released from any further obligation or
liability hereunder, except for the HRA's remedies pursuant to Section 4.5 of this
Agreement.
Section 6.2 Limitation Upon Encumbrance of Property. Prior to the
issuance of the Certificate of Completion, neither the Developer nor any successor
in interest to the Property or any part thereof shall engage in any financing or any
other transaction creating any Mortgage or other encumbrance or lien upon the
Property, whether by express agreement or operation of law, or suffer any eneum-
brance or lien to be made on or attached to the Property other than the liens or
encumbrances attached for the purposes of obtaining funds to the extent necessary
for making the Improvements and such additional funds, if any, in an amount not to
exceed the costs of developing the project, including land acquisition, without the
prior written approval of the HRA. The HRA shall not approve any Mortgage
which does not contain terms which conform to the terms of this Article VI and
Section 8.2 of this Agreement.
Section 6.3 Copy of Notice of Default to Lender. Whenever the HRA shall
deliver any notice or demand to the Developer with respect to any breach or
default by the Developer in its obligations or covenants under this Agreement, the [~
11
HRA shall at the same time forward a-copy of such notice or demand to each
Holder of any Mortgage authorized by the Agreement at the last address of such
Holder shown in the records of the HRA.
Section 6.4 Lender's Option to Cure Defaults. After any breach or default
referred to in Section 8.1 of this Agreement, each such Holder, insofar as the
rights of the HRA are concerned, shall have the right, at its option, to cure or
remedy such breach or default, or such breach or default to the extent that it
relates to the part of the Property covered by its Mortgage, and to add the cost
thereof to the Mortgage debt and the lien of its Mortgage; provided that if the
breach or default is with respect to construction of the Improvements, nothing
contained in this Section 6.4 or any other section of this Agreement shall be
deemed to permit or authorize such Holder, either before or after foreclosure or
action in lieu thereof, to undertake or continue the construction of the
Improvements or completion of the Development beyond the extent necessary to
conserve or protect Improvements or construction already made without first
having expressly assumed the obligation to the HRA, by written agreement, to
complete, in the manner provided in this Agreement, the Development or the part
thereof to which the lien or title of such Holder relates.
Any such Holder who shall promptly complete the Development or appli-
cable part thereof shall be entitled, upon written request made to the HRA, to
certification by the HRA to such effect in the manner provided in Section 4.4 of
this Agreement, and any such certification shall, if so requested by such Holder,
mean and provide that any remedies or rights that the HRA shall have or be
entitled to because of failure of the Developer or any successor in interest to the
Property, or any part thereof, to cure or remedy any default with respect to the
construction of the Improvements on other parts or parcels of the Property, or
12
because of any other default in or breach of the Agreement by the Developer or
such successor, shall not apply to the Property to which such certification relates.
Section 6.5 HRA's Option to Cure Default. In the event the Holder of
financing authorized pursuant to this Article VI sends a notice of default to the
Developer, the. Holder shall also use its best efforts to notify the HRA in writing
of; (e) the fact of the default, (b) the elements of the default, and (c) the actions
required to cure the. default. If the Developer fails to cure the default in a timely
manner or fails to make arrangements satisfactory to the Holder to cure said
default, the HRA shall have 30 days from the expiration of such cure period to cure
the default. If the HRA cures the default as set forth above, the Holder shall
pursue none of its remedies under the financing based upon the said default of the
Developer. In the event of a transfer of the title to the Property to a third party
approved by the HRA and Holder, which approval cannot be unreasonably withheld,
regardless of whether required to cure a default, said transfer shall not constitute
an Event of Default under the financing unless the. security of the Holder has, in
fact, been impaired by said transfer. In the event of such approved transfer which
does not impair the security of the Holder, the Holder shall permit the transferee
to assume all outstanding obligations and receive all remaining .disbursements .
under the financing.
Section 6.6 Subordination. In order to facilitate obtaining financing for the
construction of the Improvements by the Developer, the HRA shall agree to modify
this Agreement in the manner and to the extent it deems reasonable, upon request
by the financial institution and the Developer.
ARTICLE VII.
PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER
Section 7.1 Representation as to Redevelopment. The Developer rep~asents .
13
and agrees that its undertakings pursuant to the Agreement, are for the purpose of
development of the Property and not .for speculation in landholding. The
Developer further recognizes that, in view of:
(a} the importance of the development of the Property to the general
welfare of Richfield; and
(b) the substantial financing and other public aids that have been made
available by the HRA. for the purpose of making the Development possible
the qualifications and identity of the .Developer are of particular concern to
the HRA.
The Developer further .recognizes that it is because of such qualifications
and identity that the HRA is entering into this Agreement, and, in so doing, is
further willing to rely on the representations and undertakings of the Developer for
the faithful performance of all undertakings and covenants agreed by the
Developer to be performed.
Section ?.2. Prohibition Against Transfer of Property and Assignment of
Agreement. For the reasons set out in Section ?.1 of this Agreement, the Develop-
er represents and agrees that, except for associating with other individuals or
entities, prior to the completion of Improvements as certified by the HRA:
(a) Except only by way of security for, and only for the purpose of
obtaining financing necessary to enable the Developer or any successor in
interest to the Property, or any part thereof, to perform its obligations with
respect to the Development under this Agreement, and any other purpose
authorized by this Agreement, the Developer, except as so authorized, has
• not made or created, and that it will not make or create, or suffer to be
made or created, any total or partial sale, assignment, conveyance, or any
trust or power, or transfer in any other mode or form of or with respect to
this Agreement or the Property or any part thereof or any interest therein,
or any contract or agreement to do any of the same, without the prior
written approval of the HRA; and
(b) The HRA shall be entitled to require, except as otherwise provided in
this Agreement, as conditions to .any such approval under this Section 7.2
that: (i) Any proposed transferee shall have the qualifications and financial
responsibility, as determined by the HRA, necessary and adequate to fulfill
the obligations undertaken in this Agreement by the Developer or, in the
event the transfer is of or relates to part of the Property, such obligations
to the extent that they relate to such part. (ii) Any proposed transferee, by
instrument in writing satisfactory to the HRA and in form recordable among
• 14
the land records, shall for itself and its successors and assigns, and •
specifically for the benefit of the HRA, have expressly assumed all of the
obligations of the Developer under this Agreement and agreed to be subject
to such obligations, restrictions and conditions or, in the event the transfer
is, of, or relates to part of the Property, such obligations, conditions, and
restrictions to the extent that they relate to such part; provided, that the
fact that any transferee of, or any other successor in interest .whatsoever
to, the Property or any part thereof, shall, for whatever reason, not have
assumed such obligations or agreed to do so, .shall not, unless and only to
the extent otherwise specifically provided in the Agreement or agreed to in
writing by the HRA, relieve or except such transferee or successor from
such obligations, conditions, or restrictions, or deprive or limit the HRA of
or with respect to any rights or remedies or controls with respect to the
Property or the construction of the Improvements; it being the intent of
this Section ?.2, together with other provisions of this Agreement, that to
the fullest extent permitted by law and equity and excepting only in the
manner and to the extent specifically provided otherwise in the Agreement
no transfer of, or change with respect to, ownership in the Property or any
part thereof, or any interest therein, however consummated or occurring,
whether voluntary or involuntary, shall operate, legally or practically, to
deprive or limit the HRA, of any rights or remedies or controls provided in
or resulting from this Agreement with respect to the Property and the con-
struction of the Improvements that the HRA would have had, had there been
no such transfer or change. (iii) There shall be submitted to the HRA for
review all instruments and other legal documents involved in effecting
transfers described herein, and if approved by the HRA, its approval shall
be indicated to the Developer in writing.
In the absence of specific written agreement by the HRA to the contrary, no
such transfer or approval by the HRA thereof shall be deemed to relieve the
Developer from any of its obligations with respect thereto.
Section 7.3 Approvals. .Any approval required to be given by the HRA under
this Article VII may be denied only in the event that the HRA reasonably
determines that the ability of the Developer to perform its obligations under this
Agreement will be materially impaired by the action for which approval is sought.
ARTICLE VIII.
EVENTS OF DEFAULT
Section 8.1 Events of Default Defined. The following shall be deemed
Events of Default under this Agreement and the term shall mean, whenever it is
15
used in this Agreement, unless the context otherwise .provides, any one or more of
the. following events:
(a) Failure by the Developer to pay when due the payments required to
be paid or secured under any provision of this Agreement;
(b) Failure by the Developer to observe and substantially perform any
covenant, condition, obligation or agreement on its part to be observed or
performed hereunder, after written notice to the Developer as provided in
this Agreement;
(c) If the Developer shall admit in writing its inability to pay its debts
generally as they become due, or shall file a petition in bankruptcy, or shall
make an assignment for the benefit of its creditors, or shall consent to the
appointment of a receiver of itself or of the whole or any substantial part
of the Property;
(d) If the Developer, on a petition in bankruptcy filed against it, be
adjudicated a bankrupt, or a court of competent jurisdiction shall enter an
order of decree appointing, without the consent of the Developer, a receiver
o~ the Developer or of the whole or substantially all of its property, or
approve a petition filed against the Developer seeking reorganization or
arrangement of the Developer under the federal bankruptcy laws, and such
adjudication, order or decree. shall. not be vacated or set aside or stayed
within 60 days from the date of entry thereof; or
(e) If the Developer is in default under any Mortgage and has not entered
into awork-out agreement with the Mortgagee.
Section 8.2. Remedies on Default. Whenever any Event of Default occurs,
the HAA may, in addition to any other remedies or rights given the HRA under this
Agreement but only after the Developer's failure, to cure within 30 days of written
notice of default, take any one or more of the following actions:
(a) suspend its performance under this Agreement until it receives
assurances from the Developer, deemed reasonably adequate by the HAA,
that the Developer will cure its default and continue its performance under
this Agreement;
(b) cancel or rescind this Agreement;
(e) withhold the Certificate of Completion; or
(d) take whatever action at law or in equity may appear necessary or
desirable to the HRA to collect any payments due under this Agreement, or
to enforce performance and observance of any obligation, agreement, or
covenant of the Developer under this Agreement; ~ '
16
rovided, however, that any exercise by the HRA of its rights or remedies
P
hereunder shall always be subject to and limited by, and shall not defeat, render
invalid or limit in any .way (s) the lien of any Mortgage authorized by this
Agreement and (b) any rights or interests provided in this Agreement for the
protection of the Holders of a Mortgage; and provided further that should any
Mortgagee succeed by foreclosure of the Mortgage or deed in lieu thereof to
Developer's interest in the Property, it shall, notwithstanding the foregoing, be
obligated to perform the following obligations of the Developer only to the extent
that the same have nat theretofore been performed by the Developer: Sections 3.1
and 3.3, Sections 4.1 through 4.5; Sections 5.1 and 5.2. Said Mortgagee, upon
foreclosure or taking of a deed in lieu, shall have no obligations pursuant to this
Agreement other than as specifically set forth in the foregoing sentence.
Section 8.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the HRA is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the HRA or the Developer to exercise any remedy reserved to it, it shall
not be necessary to give notice, other than such notice as may be required in this
Article VIII.
Section 8.4 No Additional Waiver Implied by One Waiver. In the event any
covenant or agreement contained in this Agreement should be breached by either
party -and thereafter waived by the other party, such waiver shall be limited to the
17
particular breach so waived and shall aot be deemed to waive any other concurrent,
previous or subsequent .breach hereunder.
ARTICLE IX.
ADDITIONAL PROVISIONS
Section 9.1 Conflict of Interests; Representatives Not Individually Liable.
No HRA officer who is authorized to take part in any manner in making this
Agreement in his or her official capacity shall voluntarily have a personal financial
interest in this Agreement or benefit financially therefrom. No member, official,
or employee of the HRA shall be personally liable to the Developer, or any
successor in interest, in the event of any default or breach by the HRA or for any
amount which may become due to the Developer or successor or on any obligations
under the terms of this Agreement.
Section 9.2 Non-Discrimination. The provisions of Minnesota Statutes,
Section 1$1.59, which relate to civil rights and non-discrimination, and any
affirmative action program of the City shall be considered a part of this
Agreement and binding on the Developer as though fully set forth herein.
Section 9.3 Notice of Status and Conformance. At such time as all of the
provisions of this Agreement have been fully performed by the Developer, the
HRA, upon not less than ten days prior written notice by the Developer, agrees to
execute, acknowledge and deliver, without charge to the Developer or to any
person designated by the Developer, a statement in writing in recordable form
certifying the extent to which this Agreement has been performed and the obliga-
tions hereunder satisfied.
Section 9.4 Notices and Demands. Except as otherwise expressly provided
in this Agreement, a notice, demand or other communication under this Agreement
ra
by either party to the other shall be sufficiently given or delivered if it is sent by •
mail, postage prepaid, return receipt requested or delivered personally:
(a) As to the City:
Richfield HRA
Executive Director
6700 Portland Avenue
Richfield, Minnesota 55423
(b) As to the Developer:
or at such other address with respect to either such party as that party may, from
time to time, designate in writing and forward to the other as provided in this
Section 9.4.
Section 9.5 Counterparts. This Agreement may be simultaneously executed
in any number of counterparts, sll of which shall constitute one and the same
instrument.
•
19
IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly exe-
cuted in its name and behalf and its seal to be hereunto duly. affixed and the
Developer has caused this Agreement to be duly executed as of the day and year
first above written.
•
RC125-041
•
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
sy
Its Chairperson
By
Its Executive Director
[DEVELOPER)
By
Its
By
Its
20
•
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1990, by Thomas Harms and James Prosser, the Chairperson and
Executive Director, respectively, of the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, a body corporate and politic, on behalf of
the HRA.
Notary Public
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1990, by and ,the
and of a
Minnesota , on behalf of the
Notary Public
•
•
21
•
EXHIBIT A
LIST OF CONSTRUCTION PLAN DOCUMENTS.
The Construction Plans consist of the following documents which are on file with
the HRA:
(to be completed prior to execution)
•
•
•
EXHIBIT B
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that
has fully and completely complied with its obligations under Article IV of that
document entitled "Contract for Private Development," dated
between the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota with respect to construction of the Improvements in
accordance with. the approved construction plans and is released and forever
discharged from its obligations to construct under such above-referenced Article.
DATED:
Hy
Its Chairperson
Hy
Its Executive Director
•
•
The legal description of the property is as follows:
(To Be Supplied Before Execution.)
EXHIBIT C
•
EXHIBIT D
ASSESSMENT AGREEMENT
AND
CERTIFICATION OF ASSESSOR
THIS AGREEMENT, made and entered into this day of ,
1990, by and between the Housing and Redevelopment .Authority in and for the City
of Richfield, Minnesota, a body corporate and politic under the laws of Minnesota
and having its principal office at 6700 Portland Avenue, Richfield, Minnesota
(HRA) and , a Minnesota
having its principal office at
Minnesota (Developer).
WITNESSETH:
WHEREAS, the HRA is administering a Tedevelopment Project created
pursuant to Minnesota Statutes Sections 469.001 through 469.04?; and
WHEREAS, the HRA is administering Tax Increment Financing District No.
•
created pursuant to Minnesota Statutes Sections 469.174 through 469.179; and
WHEREAS, the parties have entered into ~e Contract for Private
Development (Development Agreement), dated ~
regarding the development of certain real property located in the Redevelopment
Project and Tax Increment Financing District No. within the City of
Richfield and legally described as
Hennepin County, Minnesota; end
WHEREAS, it is contemplated that pursuant to said Development
Agreement the Developer will construct the Improvements described in such
Development Agreement and shall complete them prior to January 2, 19~; and
D - 1.
WHEREAS, the HRA and the Developer desire to establish minimum market
values for said land and the Improvements to be constructed thereon (collectively,
the Property), pursuant to Minnesota Statutes Section 469.177, Subdivision 8; -and
WHEREAS, the assessor has reviewed the plans and specifications for the
Improvements which will be constructed.
NOW, THEREFORE, the parties do hereby agree as follows:
1. On January 1, 19_, the minimum market value of the Property shall be
$ Said minimum market value shall remain in effect for the
term of this Agreement as described in paragraph 4 hereof.
2. Nothing in this Agreement shall limit the discretion of the assessor or any
other public official or body having the duty to determine the market value
of the Property for ad valorem tax purposes to assign to the Property a
market value in excess of the minimum market value specified in this
Agreement.
3. Neither the preambles nor the provisions of this Agreement are intended nor
shall they be construed as modifying the terms of the Development
Agreement.
4. This Agreement shall remain in effect and inure to the benefit and be
binding upon the successors and assigns of the parties through payment of
the real estate taxes due and payable in
5. As provided in Minnesota Statutes Section 469.177, Subdivision 8, a Bogy of
which is attached hereto, nothing contained herein shall be deemed to limit
the right. or opportunity of the Developer to challenge through any legal
means that part of any valuation on the market value of the Property which
is in excess of the stipulated minimum market value contained in this
Agreement, provided, however, that the Developer may not institute or
D-2
prosecute any challenge to the excess which if successful would also result •
in a reduction of the market value below the stipulated value.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
By
Its Chairperson
Hy
Its Executive Director
[DEVELOPER]
RC125-041
By
Its
By
Its
D-3
I~~
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1990, by Thomas Harms and James Prosser, the Chairperson and
Executive Director, respectively, of the Housing and Redevelopment Authority in
and for .the City of Richfield, Minnesota, a body corporate and politic under the
laws of the state of Minnesota, on behalf of the HRA.
Notary Public
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this
1990, by and
and of
Minnesota
on behalf of the
day of
the
a
Notary Public
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D-4
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CERTIFICATION BY ASSESSOR
The undersigned, having reviewed the plans and specifications for the
improvements to be constructed and the market. value assigned to the land upon
which the improvements are to be constructed, and being of the opinion that the
market value contained in the foregoing Agreement appears reasonable, hereby
certifies as follows: The undersigned Assessor, being legally responsible for the
assessment of the above-described property,. hereby certifies that the market value
assigned to such land and improvements upon completion of the improvements to
be constructed thereon shall not be less than the amounts contained in paragraph 1
of the foregoing Agreement until termination of the Agreement.
Assessor
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
1990, by ,the Assessor of the County of
Hennepin, Minnesota.
Notary Public
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D-5
MINNESOTA SMATUTES, SECTION 469.177, SUBDIVISION 8
Subd. 8. Assessment agreements. An authority may, upon
entering into a development or redevelopment agreement pursuant
to section 469.176, subdivision 3, enter into a written
assessment agreement in recordable form with the developer or
redeveloper of property within the tax increment financing
district which establishes a minimum market value of the land and
completed improvements to be constructed thereon until a
specified termination. date, which date shall be not later than
the date upon which tax increment will no longer be remitted to
the authority pursuant to section 469.176, subdivision 1. The
assessment agreement shall be presented to the county assessor,
or city assessor having the powers of the county assessor, of the
jurisdiction in which the tax increment financing district is
located. .The assessor 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, shall execute the
following certification upon the agreement:
The undersigned assessor, being legally responsible for
the assessment of the above described property upon
completion of the improvements to be constructed thereon,
hereby certifies that the market value assigned to the
land and improvements upon completion shall not be less
than $
Upon transfer of title of the land to be developed or
redeveloped from the authority to the developer or redeveloper,
the assessment agreement, together with a copy of this
subdivision, shall be filed for record and recorded in the office
of the county recorder or filed in the office of the registrar of
titles of the county where the real estate or any part thereof is
situated. Upon completion of the improvements by the developer
or redeveloper,. the assessor shall value the property pursuant to
section 273.11, except that the market value assigned thereto
shall not be less than the minimum market value contained in the
assessment agreement. Nothing herein shall limit the discretion
of the assessor to assign a market value to the property in
excess of the minimum market value contained in the assessment
agreement nor prohibit the developer or redeveloper from seeking,
through the exercise of administrative and legal remedies, a
reduction in market value for property tax purposes; provided,
however, that the developer or redeveloper shall not seek, nor
shall the city assessor, the county assessor, the county auditor,
any board of review, any board of equalization, the commissioner
of revenue, or any court of this state grant a reduction of the
market value below the minimum market value contained in the
r~
D-6
assessment agreement during the term of the agreement filed of t
record regardless of .actual market values which may result from
incomplete construction of improvements, destruction, or
diminution by any cause,, insured or uninsured, except in the case
of acquisition or reacquisition of the property by a public
entity. Recording or filing of an assessment agreement complying
with the terms of this subdivision shall constitute notice of the
agreement to any subsequent purchaser or encumbrances of the land
or any part thereof, whether voluntary or involuntary, and shall
be binding upon them.
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H90-3-0110 D-7
•
List of Structures or Improvements to be Retained
(to be completed prior to execution)
•
EJ~~IBIT E
C.
•
Design Standards
(copy of design standards to be attached)
EXHIBIT F
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EXHIBIT G
LICENSE AGREEMENT
This License Agreement made and entered into this day of ,
1990, by and between , a Minnesota
having its principal office at ,
(Licensor), and the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota, a Minnesota body corporate and politic having its principal
office at 6700 Portland Avenue, Richfield, Minnesota (Licensee):
WITNESSETH:
WHEREAS, Licensor is the fee owner of certain property located in the City
of Richfield, Hennepin County, Minnesota and legally described as
(Property); and
WHEREAS, the Property is within a Redevelopment Project (Project) and
Tax Increment Financing District No. _ (TIF District), duly established by
Licensee pursuant to Minnesota Statutes, Sections 469.001 through 469.047 and
Sections 469.174 through 469.179, respectively; and
WHEREAS, Licensee has adopted a redevelopment plan (Redevelopment
Plan) and a tax increment financing plan (TIF Plan) for the Project and TIF District
+ which call for Licensee to perform certain demolition work on the Property
(Demolition Work), which work is more fully described in that certain Contract for
Private Development (Contract) dated between the
Licensor and the Licensee and in Exhibit E to the Contract; and
WHEREAS, the Demolition Work is for the purpose of encouraging
development within the Project; and
WHEREAS, Licensor has agreed to make the Property available to the
Licensee for the purpose of allowing Licensee to perform the Demolition Work.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein and in the Contract, the parties do hereby agree as
follows:
1. Licensor hereby grants to Licensee a license over, on and across the
Property for the purpose of allowing Licensee to perform the Demolition
Work and to take any and all actions necessarily related thereto. This
license provides anon-exclusive right to enter the Property by Licensee and
is not revocable by the Licensor without Licensee's written consent.
2. Licensee shall pay no rent to the Licensor under the license hereby granted.
3. The term of this license shall commence on the day first written above and
shall terminate-upon. completion by the Licensee of the Demolition Work,
but in no event later than , or such other date as may be.
mutually agreed to in writing by the parties.
4. Licensee agrees to carry public liability. insurance in an amount sufficient to
protect Licensor and Licensee from any and all claims arising out of the
actions of Licensee, its agents or contractors in competing the Demolition
Work on the Property.
5. Licensor shall at all times remain responsible for the payment of all taxes
and special assessments levied against the Property.
IN WITNESS WHEREOF, Lessor and Lessee have caused this License
Agreement to be entered into as of the day and year first written above.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
RICHFIELD, MINNESOTA
Hy
Its Chairperson
By
Its Executive Director
[DEVELOPER]
Hy
Its
Hy
Its
RC125-041
STATE OF MINNESOTA )
ss
COUNTY OF S
The foregoing instrument was acknowledged before me this day of
1990, by Thomas Harms and James Prosser, the Chairperson and
Executive Director, respectively, of the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, a body. corporate and politic, on behalf of
the HRA.
Notary Public
STATE OF MINNESOTA ~
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1990, by and ,the
and of ~ a
Minnesota , on behalf of the
Notary Public
•
fern+Ne. ~1•M-pU1T CLAIM DEED
COrperetgn Or -eRnMllip
r Corae.etbn or -ertnertAip
Mlen•wu Vel)orm Coeveru,etnt a4nk+UYTl1 Exhibit H
No delinquent to:ec and transfer entered; Certificate
of Real Estate Value ( )filed ( )not required
Certificate of Real Estate Value No.
,19
County Auditor
by
De
STATE DEED TAX DUE HEREON: 5
Date: , 19 _
FOR VALUABLE CONSIDERATION, the Housin and Redevelo m
the City of Richfield, Minnesota ,e -public bp~y corporate a~~Q sof
MinnPCOta ,Grantor, hereby conveys and quitclaims to
,Grantee,
a under the laws of , red property ~
County, Minnesota, described as follows:
(insert legal description of Property prior to execution)
•
(if Mort tpaa is needttl, ppntinl/t on t»ekl
together with all hereditaments and appurtenances belonging thereto.
\ff a Il•.wd "fay Fl:unp Hrrl~
STATE OF MINNESOTA
COUNTY OF
~-
By
Its Chairperson
By
Its Exar,tivn nirnrtnr
The foregoing was acknowledged before rae thu day of ,19_ ,
by Thomas Harms and lames Prosser ,
the Chairperson and )<xecLtive Director
of ,a public bodv coroorate and oolitic
under the law c L nneso a , on behalf of the HRA
NOTAalA1 aTAMt Oa aEAL <Oa OTNLa TITLL Oa aANK>
_______ _ .__ _ _ _J
TNIa tNLTaI)MLN7 WAa DiATTLD aY OtAlit AND ADDa[ia):
aiONATVa[ OT lLaaON TA[INO ACLNOO'LiDOIILNT
Tu ateteteau ter itw rtoprts b tYY Wte>vat ireul0
M rat r-0 paduAt nut ~ datett at Owwe>:
I,hlwr•D~.~, fi u~nl...ee~~.
•