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11-20-2017 Complete AgendaR E G U L AR H O U S IN G AN D R E D E V E LO P ME N T AU T H O R IT Y MEET IN G R IC H F IE L D MU N IC IPAL C EN TER, C O U N C IL C H AMB E R S N O V E MB E R 20, 2017 7:00 P M C all to Order Oath of office of Ri chfi eld Housing and Redevelopment A uthority C ommissioner, E ri n Vri eze D aniels. C onsideration of the election of a S ecretary for the Richfield Housing and Redevelopment A uthority for the remainder of 2017. Approval of the Minutes A pproval of the mi nutes of the regular Housing and Redevelopment A uthority meeti ng of October 16, 2017. AG E N D A AP P R O VAL 1.A pproval of the A genda 2.Consent C alendar contains several separate items which are acted upon by the H R A in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further H R A action on these items is necessary. However, any H R A Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for H R A discussion and action. All items listed on the Consent Calendar are recommended for approval. A .C onsi deration of the approval of a resoluti on authorizing an agreement wi th the Greater Metropolitan Housing C orporation for the acquisi ti on, rehabilitation, and sale of homes under the New Home P rogram uti lizi ng 2017 C ommunity D evelopment B lock Grant funds. S taff Report No. 45 B .C onsi deration of the approval of a resoluti on authorizing the use of an A ffordable Housing Initiative F und loan for the acquisition of 6521 S tevens Avenue by the West Hennepi n A ffordable Housing L and Trust. S taff Report No. 46 C .C onsi deration of the approval of a resoluti on accepting contributions for the 2017 Tour of Remodeled Homes. S taff Report No. 47 D .C onsi deration of the approval of a proposed adjustment of payment standard for the S ection 8 Rent A ssi stance program. S taff Report No. 48 3.C onsideration of items, if any, removed from C onsent C alendar R E S O L U T IO N S 4.C onsideration of the approval of resolutions adopting a modification to the Redevelopment P lan for the Richfield Redevelopment P roject A rea, a modification to the Tax Increment F inancing P lan for the C edar Avenue Tax Increment F i nancing D istrict, establishing Tax Increment F inancing D istrict 2017-1 (The C hamberlain) within the Richfield Redevelopment P roject A rea, and adopting a Tax Increment F inanci ng P lan therefor. S taff Report No. 49 P U B LIC H EAR IN G S 5.P ublic heari ng and consideration of the approval of a resolution approving the conveyance of property located along 18th Avenue between 66th and 68th S treets to C hamberlain A partments L L C . S taff Report No. 50 O T H E R B U SIN E S S 6.C onsideration of the approval of a petition requesting that the C ity C ouncil consi der the vacation of portions of 67th S treet within the boundaries of the new C hamberlain development. S taff Report No. 51 H R A D IS C U S S IO N IT E MS 7.H R A D iscussion Items E X E C U T IV E D IR EC TO R R E P O R T 8.E xecutive D i rector's Report C L AIMS AN D PAYR O LL S 9.C laims and P ayrolls 10.A djournment Auxiliary aids for individuals with disabilities are available upon request. R equests must be made at least 96 hours in advance to the C ity Clerk at 612-861-9738. AGENDA SECTION:Call to Order AGENDA ITEM # STAFF RE P ORT NO. 44 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: J ared Voto, E xecutive A ide/A nalyst D E PA RTM E NT D IRE C TOR RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the election of a Secretar y for the R ichfield Housing and Redevelopment Authority for the remainder of 2017. E X E C UT IV E S UM M ARY: On J anuary 17, 2017, the Ric hfield Housing and Redevelopment Authority (HRA) elec ted its offic ers for 2017. Doris Rubenstein was elec ted Secretary. Her term on the HRA expired in Oc tober 2017, leaving a vacanc y in the position of Sec retary of the HRA for 2017. The HRA bylaws provide that should the office of S ec retary become vacant, the Authority shall elect a suc cessor from its membership at the next regular meeting, and such election shall be for the unexpired term of said office. Election of offic ers for 2018 will take place at the regular meeting in J anuary. RE C O M M E ND E D AC T IO N: By Motion: Elect a S ecretary for the Richfield H ousing and Redevelopment Authority for the remainder of 2017. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT Provided in the Exec utive Summary. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The HRA bylaws provide for the elec tion of offic ers and filling of vacanc ies for the offic e of Chair, Vic e Chair, and Sec retary. C.C R IT IC AL T IMIN G ISSU E S: The HRA bylaws state if the office of C hair, Vice C hair, or Secretary become vac ant, the Authority shall elec t a succ essor from its membership at the next regular meeting. The next regular meeting is November 20, 2017. D.F IN AN C IAL IMPAC T: N/A E.L E GAL C ON S ID E R AT ION : None ALT E R N AT IV E R E C O MME N D AT IO N(S): None P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting October 16, 2017 CALL TO ORDER The meeting was called to order by Chair Supple at 7:00 p.m. HRA Members Mary Supple, Chair; Pat Elliott; Michael Howard; Doris Rubenstein; and Present: Sue Sandahl. Staff Present: John Stark, Community Development Director; and Kate Aitchison, Housing Specialist. APPROVAL OF THE MINUTES OF THE REGULAR HRA MEETING OF SEPTEMBER 18, 2017 M/Elliott, S/Sandahl to approve the minutes of the Regular Housing and Redevelopment Authority meeting of September 16, 2017; Motion carried 5-0. Item #1 RECOGNITION OF OUTGOING COMMISSIONER DORIS RUBENSTEIN FOR 10 YEARS OF SERVICE ON THE HRA Commissioner Rubenstein stated that serving on the HRA has been the most satisfying committee-experience of her life. She offered her thanks to all the commissioners she has worked with. Chair Supple presented Commissioner Rubenstein with a certificate and plaque. Item #2 HRA APPROVAL OF THE AGENDA M/Elliott, S/Howard to approve the agenda. Motion carried 5-0. Item #3 CONSENT CALENDAR Community Development Director Stark presented the consent calendar: A. Consideration of the approval of a contract with S.R. Stevens Excavating, Inc. for the demolition of 6839 Cedar Avenue (S.R. 40). M/Rubenstein, S/Sandahl to approve the consent calendar. Commissioner Rubenstein asked about the long-term plan for the property. Community Development Director Stark responded that ultimately the area will be redeveloped, but it will remain vacant until a developer is found to pursue that area. Motion carried 5-0. HRA Meeting Minutes -2- October 16, 2017 Item #4 CONSIDERATION OF THE APPROVAL OF A RESOLUTION APPROVING A REVISED CONTRACT FOR PRIVATE DEVELOPMENT WITH INLAND DEVELOPMENT PARTNERS FOR THE CEDAR POINT SOUTH REDEVELOPMENT AREA. Community Development Director Stark presented Staff Report 41, outlining the changes being requested to the contract for private development. Bob Cunningham of Inland Development Partners, was available to answer questions. Commissioner Howard asked if any substantial changes were being made. Community Development Director Stark responded that one planned single-family home purchase was removed from the agreement for budgeting reasons. Chair Supple expressed her appreciation for the incorporation of affordable housing items, such as the prohibition against excluding Section 8 clientele and a 90-day notice of sale of the building. Chair Supple asked for clarification about the TIF district. Community Development Director Stark explained the nuances of this specific TIF district. Chair Supple asked for clarification on the MAC grant from 2002. Community Development Director Stark explained that clarifying language was added to the contract to meet MAC guidelines for sound attenuation. Chair Supple asked about the results of Hennepin County grants that were previously applied for earlier in the year. Community Development Director Stark answered that bids came in higher than the amount requested from Hennepin County. M/Howard, S/Elliott, to approve a resolution authorizing a revised contract for private development with Inland Development Partners for the Cedar Point South Redevelopment Area. Motion carried 5-0. Item #5 CONSIDERATION OF THE APPROVAL OF A RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR LAND COSTS AND OTHER QUALIFIED COSTS IN THE PROPOSED TAX INCREMENT FINANCING DISTRICT 2017-1 HOUSING (THE CHAMBERLAIN). Community Development Director Stark presented Staff Report 42. Commissioner Rubenstein asked about the sunset-period of August 2026. Community Development Director Stark confirmed that she was correct. M/Rubenstein, S/Sandahl to approve of a resolution authorizing an interfund loan for land costs and other qualified costs in the proposed tax increment financing district 2017-1 housing (the Chamberlain). Motion carried 5-0. Commissioner Sandahl asked about the origins of the name ‘The Chamberlain’. Bob Cunningham, of Inland Development Partners, explained the meaning of the name ‘The Chamberlain’. He explained that the Art Commission will be involved in the public art that will be part of the project. Item #6 CONSIDERATION OF THE APPROVAL OF AN ASSIGNMENT OF A HOUSING AND REDEVELOPMENT AUTHORITY FIRST TIME ADVANTAGE LOAN AT 7632 CHICAGO AVENUE TO VIKING HOME BUYERS, LLC. Housing Specialist Kate Aitchison presented Staff Report 43. Commissioner Sandahl expressed her support the sale and the HRA’s previous experience assigning liens in similar situations. HRA Meeting Minutes -3- October 16, 2017 M/Sandahl, S/Howard to approve the assignment of a Housing and Redevelopment Authority First Time Advantage Loan at 7632 Chicago Avenue to Viking Home Buyers, LLC. Motion carried 4-0. Item #5 HRA DISCUSSION ITEMS Chair Supple made note of success of the recent Renovation Celebration Home Tour, held on October 7, 2017. Housing Specialist Kate Aitchison noted that over 350 people attended and that the tour was well-received. Item #6 EXECUTIVE DIRECTOR REPORT Community Development Director John Stark mentioned that he and Housing Manager, Julie Urban, are working with developers for the Cedar Point II area, and hope to have at least 1 proposal ready by the end of the year. They also hope to communicate better with neighbors as they move forward. Commissioner Rubenstein asked if the city has any experience with the developers interested in the project. Community Development Director John Stark responded that there are some familiar names/developers interested in the site. Item #7 CLAIMS AND PAYROLL M/Sandahl, S/Elliott, that the following claims and payroll be approved: U.S. BANK 10/16/17 Section 8 Checks: 129141-129221 $142,709.74 HRA Checks: 32249-33293 $43,325.01 TOTAL $186,034.75 Motion carried 5-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 7:39 p.m. Date Approved: November 20, 2017 Mary B. Supple HRA Chair Kate Aitchison Steve Devich Housing Specialist Executive Director AGENDA SECTION:Consent Calendar AGENDA ITEM #2.A. STAFF RE P ORT NO. 45 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: C eleste McD ermott, Housing S pecialist D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 11/14/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution authoriz ing an agreement with the G reater Metropolitan Housing Cor poration for the acquisition, rehabilitation, and sale of homes under the N ew Home Program utiliz ing 2017 Community Development Block G rant funds. E X E C UT IV E S UM M ARY: The City Counc il budgeted $108,425 in 2017 Federal Fisc al Year (F F Y) Community Development Block Grant (C D B G) funds for the Housing and Redevelopment Authority (HRA) to purchase, rehabilitate, and sell houses to households earning no more than 80 percent of the area median income (A MI ). An Agreement with the Greater Metropolitan Housing Corporation (GMHC ) would enable GMHC to purchase and rehabilitate up to two homes on behalf of the HRA using the F F Y 2017 funds. I n order to ensure affordability, the C D B G funds will be used to provide development gap financing to cover the difference between the c ost to ac quire and rehabilitate the home and the proc eeds from the sale of the house. Long-term affordability will be maintained in one of two way s: Sale of the property to the W est Hennepin A ffordable Housing Land Trust (“Homes W ithin Reach”). Purchase assistance in the form of a deferred second mortgage, plus requiring a “right of first refusal” that would enable the HRA to buy back the home upon resale and sell it to another income-qualified household. To date, one property at 7208 Penn Avenue has been identified for purchase and rehabilitation with the funds. A sec ond property would be identified before the end of the federal fiscal year on J une 30, 2018. RE C O M M E ND E D AC T IO N: By motion: Appr ove a resolution authorizing execution of an agreement with the G reater Metropolitan Housing Cor poration for the acquisition, rehabilitation, and sale of homes utilizing 2017 Community Development B lock Grant funds. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT On February 14, 2017 the City Council approved the use of Federal C D BG funds for the acquisition and rehabilitation of homes through the HRA’s New Home Program. Under the New Home Program, the HRA has worked with a variety of developers over the years to either build new homes or purchase and rehabilitate existing homes and make them available to households earning no more than 80 percent of the A MI . On D ec ember 19, 2016, the HRA approved an Agreement with the Greater Metropolitan Housing Corporation (GMHC ) to purchase and rehabilitate two homes on behalf of the HRA using F F Y 2016 C D B G funds. The first home, 6521 Stevens Avenue, has been rehabilitated and will be sold via the W est Hennepin Affordable Housing Land Trust in mid-December. The second home, 6800 Portland, has been purchased and is currently out to bid for the rehabilitation work. GMHC has suc cessfully purchased and rehabilitated nine homes for the HRA through the Neighborhood Stabilization Program (NS P) and two homes with C D B G funds. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The HRA’s New Home Program serves to enc ourage the development of new housing opportunities for low and moderate income families through the construc tion of new affordable housing and/or the acquisition and extensive rehabilitation of existing single-family homes. Purc hasing and rehabilitating homes with C D B G funds carries out the policies of the City’s Comprehensive Plan, inc luding: S upporting the rehabilitation and upgrading of the existing housing stoc k. P romoting the development, management, and maintenance of affordable housing in the City through assistance programs, alternative funding sourc es, and the creation of partnerships whose mission it is to promote low to moderate income housing. C.C R IT IC AL T IMIN G ISSU E S: One property has been identified for purc hase and rehabilitation with FF Y 2017 funds (7208 Penn Avenue). Approval of the Agreement would allow the HRA and GMHC to complete the purchase and rehabilitation of this home and spend funds by the J une 30, 2018 deadline. D.F IN AN C IAL IMPAC T: The C ity Council budgeted $195,000 in FF Y 2016 and $108,425 in F FY 2017 C D B G funds for the HRA to acquire, rehabilitate and sell homes to homebuyers earning no more than 80 percent of the area median inc ome. The HRA will provide development gap financ ing utilizing the C D B G funds to c over the difference between the cost to acquire and rehabilitate the property and the proc eeds earned from the sale of the property. Maximum reimbursement under this A greement is $108,425 for up to two homes. The A greement provides for HRA staff to approve the acquisition purc hase pric e and rehab costs prior to GMHC ac quiring any property. E.L E GAL C ON S ID E R AT ION : An Agreement was approved by the HRA on D ec ember 19, 2016, for the expenditure of F F Y 2016 funds. Approval of this Agreement would authorize expenditure of FF Y 2017 funds. The A greement was prepared by HRA legal c ounsel. ALT E R N AT IV E R E C O MME N D AT IO N(S): Do not approve the Agreement. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter A greement C ontract/A greement RESOLUTION NO. ______ HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION APPROVING DEVELOPMENT AGREEMENT WITH GREATER METROPOLITAN HOUSING CORPORATION WHEREAS, the City of Richfield has entered into a Subrecipient Agreement with Hennepin County with respect to the use of CDBG funds from the Department of Housing and Urban Development (“HUD”) for federal fiscal year 2017; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) executed a Third Party Agreement (Urban Hennepin County 2017 Community Development Block Grant Program) effective July 1, 2017 (the “Authority Third Party Agreement”) with the City which provides the Authority the ability to administer the use of the fiscal year 2017 CDBG funds; and WHEREAS, the Greater Metropolitan Housing Corporation, a Minnesota nonprofit corporation (the “Developer”), has proposed to purchase, rehabilitate, and resell two or more properties located in the City of Richfield, Minnesota (the “City”) which are eligible to be purchased, rehabilitated, and resold with CDBG funds (the “Eligible Properties”); and WHEREAS, there has been presented before this Board of Commissioners of the Authority a Developer Agreement – Urban Hennepin County – 2017 Community Development Block Grant Program (the “Developer Agreement”), proposed to be entered into between the Authority and the Developer, pursuant to which the Authority will direct the Developer to purchase, rehabilitate, and resell one or more Eligible Properties using the CDBG funds; and WHEREAS, the Board has reviewed the Developer Agreement and finds that the execution thereof by the Authority and the performance of the Authority’s obligations thereunder are in the best interest of the City and its residents; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Developer Agreement is hereby in all respects authorized, approved, and confirmed, and the Chairperson and the Executive Directed are hereby authorized and directed to execute the Developer Agreement for and on behalf of the Authority in substantially the form now on file with the Community Development Director but with such modifications as shall be deemed necessary, desirable, or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all modifications therein. 2. The Chairperson and the Executive Director are hereby authorized to execute and deliver to the Developer any and all additional documents deemed necessary to carry out the intentions of this resolution and the Developer Agreement. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of November, 2017. Mary Supple, Chair ATTEST: Doris Rubenstein, Secretary 1 DEVELOPER AGREEMENT URBAN HENNEPIN COUNTY 2017 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM (Greater Metropolitan Housing Corporation) THIS DEVELOPER AGREEMENT (the “Agreement”), made and entered into as of this ______ of _________, 2017 (“Effective Date”), by and between the Housing and Redevelopment Authority in and for the City of Richfield (“Authority” or “HRA”), 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 the Greater Metropolitan Housing Corporation, a nonprofit corporation under the laws of Minnesota, having its principal office at 15 South Fifth Street, Suite 710, Minneapolis, Minnesota 55402 (“Developer” or “GMHC”). RECITALS A. The City of Richfield (the “City”) is a cooperating unit in the Urban Hennepin County Community Development Block Grant (CDBG) Program by virtue of a Joint Cooperation Agreement dated October 1, 2017 and executed between the Authority and Hennepin County pursuant to Minn. Stat. Section 471.59. B. The City executed a Subrecipient Agreement with Hennepin County (Subrecipient Agreement No. A177272), effective July 1, 2017 (the “Subrecipient Agreement”), which approved the use of $108,425 of Federal Fiscal Year 2017 CDBG funds from the Department of Housing and Urban Development for the Acquisition/Scattered Site Homeownership project(s). C. The Authority executed a Third Party Agreement (Urban Hennepin County 2017 Community Development Block Grant Program) effective July 1, 2017 (the “Authority Third Party Agreement”) with the City which provides the Authority the ability to administer the use of the Fiscal Year 2017 CDBG funds. D. HRA desires GMHC to purchase, rehabilitate, and resell one or more properties eligible to be purchased, rehabilitated and resold with CDBG funds (the “Eligible Properties”) at the direction of HRA and GMHC has agreed to do so pursuant to the terms and conditions of this Agreement and 24 CFR 570 (the “CDBG Regulations”) and to use the CDBG funds available pursuant to the terms of the Subrecipient Agreement and Authority Third Party Agreement described above. E. This Agreement is intended to satisfy the requirements of 24 CFR 570.202 and the HUD Guidance so that Eligible Properties acquired by GMHC retain their eligibility for CDBG funds. AGREEMENT 1. Scope of Work. A. Developer. HRA hereby designates GMHC as a Developer to purchase, 2 rehabilitate, and resell Eligible Properties at the direction of HRA in accordance with the terms and conditions of this Agreement. B. Memorandum of Understanding. GMHC shall purchase, rehabilitate and resell Eligible Properties based on the Memorandum of Understanding of the parties set forth in EXHIBIT A. The acquisition of one Eligible Property described in the Developer Pro Formas set forth in EXHIBIT B are preliminarily approved by the HRA and GMHC shall provide the documentation described in Section 8 to the HRA to obtain final approval for the acquisition of such property. C. Criteria. The HRA and GMHC will work cooperatively to develop criteria for Eligible Properties that it would like to acquire under this Agreement. Such criteria shall include location, quality, price, and level of needed repairs. D. Compliance with Required Programs. To the extent required by federal, state, and local law and regulation, GMHC agrees to comply with the program requirements of: 1) Hennepin County Affirmative Action Policy and Commissioners’ Policies Against Discrimination; 2) Equal opportunity and discrimination provisions of 24 CFR Part 570 and all applicable State and Federal laws, rules, and regulations and as set forth in Section 3.02 of the Procedural Manual; 3) Section 504 of the Rehabilitation Act of 1973, as amended; 4) 24 CFR 570.200; and 5) Lead based paint notification, inspection, testing and abatement procedures established in 24 CFR Part 35 as referenced in 24 CFR 570.608, including but not limited to the Lead Disclosure Rule and HUD’s Lead Safe Housing Rule as set forth in Section 3.06 of the Procedural Manual; and 6) Fair housing requirements of section 104(b) and section 109 of Title I of the Housing and Community Development Act of 1974, as amended, including Title VI of the Civil Rights Act of 1964, the Fair Housing Act, and other applicable fair housing laws and as set forth in Section 3.02 of the Procedural Manual. GMHC further agrees to provide HRA with a timely certification that the program requirements listed in this Section have been met as required by law and this Agreement. E. Reports. GMHC shall provide HRA on a monthly basis with a report of its activities. F. Subrecipient Agreements. The terms and provisions of the Subrecipient Agreements described in Recitals B and C above are incorporated herein by reference and GMHC agrees to comply with the terms and provisions of such agreements to the extent applicable to the purchase, rehabilitation and resale of Eligible Properties. 3 2. Term. This Agreement is effective as of the Effective Date and until December 31, 2018. 3. Acquisition, Relocation and Displacement. GHMC shall be responsible for carrying out all acquisitions of real property necessary for implementation of this Agreement. GMHC shall conduct all such acquisitions in its name and shall hold title to all real property purchased and shall be responsible for preparation of all notices, appraisals, and documentation required in conducting acquisition under the regulations of the Uniform Relocation Assistance and Real Property Acquisition Act of 1970, as required under 49 CFR Part 24 and of the CDBG Program. GMHC shall also be responsible for providing all relocation notices, counseling, and services required by said regulations. In addition, GMHC shall comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as required under 24 CFR 570.606(a) and HUD implementing regulations at 24 CFR Part 42; the requirements in 24 CFR 570.606(b) governing the residential anti-displacement and relocation assistance plan under section 104(d) of the Housing and Community Development Act of 1974 (the Act); the relocation requirements of 24 CFR 570.606(c) governing displacement subject to Section 104(k) of the Act; and the requirements of 24 CFR 570.606(d) governing optional relocation assistance under Section 105(a)(11) of the Act. 4. Environmental Review. Prior to a commitment of CDBG funds to purchase, rehabilitate and resell Eligible Properties, GMHC and HRA will undertake the appropriate environmental review procedures and documentation as determined, requested, or required by the County. 6. Labor Standards, Employment and Contracting. GMHC shall notify the HRA prior to initiating any rehabilitation activities, including advertising for contractual services, which will include costs likely to be subject to the provisions of Federal Labor Standards and Equal Employment Opportunity and related implementing regulations. No CDBG funds shall be used directly or indirectly to employ, award contracts to, or otherwise engage the services of, or fund any contractor or subrecipient during any period of debarment, suspension, or placement in ineligibility status under the provisions of 24 CFR Part 24. Hennepin County must be notified prior to awarding a contract. Hennepin County shall be responsible for determining the status of the contractor under this requirement, and shall notify the HRA if the contractor is or is not prohibited from doing business with the Federal government as a result of debarment or suspension proceedings. 7. Lobbying. A. No federal appropriated funds have been paid or will be paid, by or on behalf of GMHC, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and 4 the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement. B. If any funds, other than federal appropriated funds, have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress, in connection with this Federal contract, grant, loan, or cooperative agreement, GMHC will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. 8. Documentation. GMHC must maintain the following records and reports relating to Eligible Properties acquired pursuant to this Agreement: appraisals, environmental reports, purchase agreements, settlement statements, and deed document number/filing information per property. GMHC shall submit copies of the foregoing documentation to HRA with respect to any Eligible Property acquired pursuant to this Agreement. 9. Other Program Requirements. GMHC shall carry out the acquisition activities under this Agreement in compliance with all federal laws and regulations described in 24 CFR Part 570, subpart K, except that (i) GMHC does not assume HRA’s environmental responsibilities described at 24 CFR 570.604; and (ii) GMHC does not assume HRA’s responsibility for initiating the review process under the provisions of 24 CFR Part 52 (Intergovernmental Review of HUD Development Programs and Activities). 10. Suspension and Termination. If GMHC materially fails to comply with any term of this Agreement after written notice and an opportunity to cure, this Agreement may be terminated. The time period for said opportunity to cure will be dependent upon the relevant time period requirements of the applicable law, regulation, program, or otherwise. 11. Notice. All communications, notices, and demands of any kind which either party may be required or may desire to give to or serve upon the other shall be made in writing, and such notice shall be deemed sufficiently given if and when it is addressed to then other party as provided below and either (a) delivered personally, (b) deposited in the United States mail, registered or certified, with postage prepaid, (c) deposited with an overnight delivery service fo r next day delivery, or (d) telecopied: To HRA: Richfield Housing and Redevelopment Authority Attention Mr. John Stark, AICP, Director of Community Development 6700 Portland Avenue Richfield, Minnesota 55423-2599 Fax: (612) 861-8974 To GMHC: Greater Metropolitan Housing Corporation Attention: Carolyn Olson 15 South Fifth Street, Suite 710 Minneapolis, MN 55402 5 12. Data Practices. GMHC agrees to abide by the provisions of the Minnesota Government Data Practices Act and all other applicable State and Federal laws, rules, and regulations relating to data privacy and confidentiality, and as any of the same may be amended. 13. Access to Records. HRA shall have the authority to review any and all procedures and all materials, notices, and documents prepared by GMHC in implementation of this Agreement. 14. Indemnification. GMHC agrees to hold harmless, indemnify and defend HRA, its elected officials, officers, agents, and employees against any and all claims, losses, or damages, including attorneys’ fees, arising from, allegedly arising from, or related to, the provision of services under this Agreement by GMHC, its employees, agents, officers, or volunteer workers. 15. Independent Contractor. Nothing in this Agreement is intended, nor may be construed, to create the relationship of partners or employer/employee between the parties. GMHC, its officers, agents, employees, and volunteers are, and will remain for all purposes and services under this Agreement, independent contractors. 16. Entire Agreement. The entire agreement of the parties is contained in this document. This Agreement supersedes all previous written and oral agreements and negotiations between the parties relating to the subject matter of this Agreement except as provided in paragraph 18 of this Agreement. 17. Severability. The invalidity, illegality or enforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, all of which shall remain in full force and effect. 18. Assignment of Agreement. The parties shall not assign this Agreement without the express written consent of the other party. 19. Modification. No provision, term or clause of this Agreement shall be revised, modified, amended or waived except by an instrument in writing signed by both parties. 20. Counterparts. This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original, all of which, when taken together, shall constitute one agreement. 21. Headings. The titles to the sections and headings of various paragraphs of this Agreement are placed for convenience of reference only and in case of conflict, the text of this Agreement, rather than such titles or headings shall control. 22. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of each of the parties hereto. 23. Invalidity. If for any reason any portion or paragraph of this Agreement shall be declared void and unenforceable by any court of law or equity, it shall only affect such particular portion or paragraph of this Agreement, and the balance of this Agreement shall remain in full force and 6 effect and shall be binding upon the parties hereto. 24. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Minnesota. 25. Obligations Limited. HRA’s obligation to make payments under this Agreement is limited entirely to CDBG funds being remitted to HRA in sufficient amounts and available for the purposes for which such payments are sought. HRA shall have no obligation to make payments under this Agreement from sources other than the CDBG funds described herein. (Signature page follows) S-1 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and GHMC has caused this Agreement to be duly executed in its name and behalf as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY AND FOR THE CITY OF RICHFIELD, MINNESOTA By ________________________________ Its Chairperson By ________________________________ Its Executive Director GREATER METROPOLITAN HOUSING CORPORATION By ________________________________ Its ________________________________ December 19, 2016 A-1 EXHIBIT A PROCEDURES Memorandum of Understanding Properties, In General:  GMHC will identify, purchase, and rehabilitate one or more Eligible Properties on the HRA’s behalf for subsequent resale to households earning at or below 80% of the Area Median Income.  The HRA reserves the right to and GMHC agrees to identify, purchase, and rehabilitate more than two Eligible Properties in the event the HRA approves additional funds for this purpose. Identification of Eligible Property:  GMHC and the HRA will work cooperatively to identify Eligible Properties.  If the HRA identifies Eligible Property, the HRA (in its sole discretion) may provide GMHC with the identity of the Eligible Property.  If GMHC identifies Eligible Property, GMHC will provide the HRA with the identity of the Eligible Property so that the HRA may decide whether the HRA will use CDBG funds to acquire said Eligible Property. Purchase of Eligible Property:  GMHC will only purchase an Eligible Property after receipt of the HRA’s express written consent.  HRA may express its written consent via email to GMHC at espencer@gmhchousing.org.  GMHC shall be responsible for the timely completion of all CDBG required documentation.  GMHC agrees to purchase and hold the Eligible Properties in its name unless the HRA informs GMHC that the HRA desires (in the HRA’s sole discretion) to hold an Eligible Property in the name of the HRA. Rehabilitation of Eligible Property:  After GMHC has purchased an Eligible Property, GMHC will work with the HRA to identify necessary improvements.  GMHC and the HRA will agree in writing to a rehabilitation plan that describes, at a minimum, expenses, improvements, and deliverable dates, prior to GMHC beginning its rehabilitation efforts at that Eligible Property.  Upon completion of the rehabilitation of each Eligible Property to the satisfaction of the HRA, GMHC will provide the HRA with all requested information, including but not limited to receipts.  The rehabilitation plan may be amended from time to time as needed with the prior mutual consent of the HRA and GMHC. December 19, 2016 A-2 Subsequent Resale of Certain Eligible Property to End Buyer:  After GMHC completes the rehabilitation of an Eligible Property, GMHC will market said Eligible Property and execute a purchase agreement with an end buyer whose household income is at or below 80% of Area Median Income.  GMHC will attempt to provide long-term affordability by working with the West Hennepin Affordable Housing Land Trust (WHAHLT) to secure a buyer.  If WHAHLT is unable to purchase the property, the property will be sold on the open market. Purchase assistance in the form of a second mortgage will be required and buyer will be required to sign a “Right of First Refusal” document, in substantially the form set forth in “Exhibit B.” Reimbursement of Acquisition/Rehabilitation Costs (or Payment of the Estimated Gap)  GMHC will use its own funds to purchase an eligible property.  The HRA will use HRA funds to reimburse GMHC for the “Development Gap.” Development Gap means the estimated total development costs less the sales price of the improved property up to a maximum gap amount as shown on “Exhibit C” or other developer pro forma approved by the HRA.  Following the acquisition of the property, GMHC may request that the HRA provide payment in the amount of the estimated Development Gap.  Upon final sale of the property, if the cost to acquire and rehabilitate the property exceeds the amount of sales proceeds by more than the Development Gap amount paid by the HRA, the HRA will reimburse GMHC for that amount.  If the amount of sales proceeds and the Development Gap paid by the HRA exceeds the cost to acquire and rehabilitate the property, GMHC will reimburse the HRA for that amount.  The maximum amount of reimbursement available under this Agreement is $108,425. B-1 EXHIBIT B RIGHT OF FIRST REFUSAL This AGREEMENT is made as of the ___day of __________, 20__, by and between _____________________, a single person, (marital status) and the HOUSING AND REDEVELOPMEN T AUTHORITY IN AND F OR THE CITY OF R ICHFIEL D , a public body corporate and politic under the laws of the State of Minnesota, whose address is 6700 Portland Avenue, Richfield, Minnesota 55423 (“Second Party”). Recitals A Contemporaneous ly with the execution hereof, Second Party as the fee owner of the real estate described on Exhibit A attached hereto and incorporated herein (the “Property”), subject to matters of record, is conveying the Property to First Party. B. First Party and Second Party desire to enter into this Agreement whereby First Party grants to Second Party the right of first refusal to purchase the Property. NOW, THEREFORE, in consideration of the Recitals and of the sum of One Dollar ($1.00) and other good and valuable consideration and of the obligations of First Party and Second Party as hereinafter set forth, First Party and Second Party agree as follows: 1. Incorporation of Recitals. The Recitals are incorporated into and made a part of this Agreement. 2. First Refusal Right. Second Party shall have the right to purchase the Property in accordance with the terms and conditions herein (the “First Refusal Right”); (a) First Party shall notify Second Party of First Party's desire to sell the Property or any portion thereof (“Sale Notice”) at least thirty (30) days before: (i) listing the Property for sale; (ii) making a formal offer to sell the Property to a third party; or (iii) accepting an offer from a third party seeking to purchase the Property, or (iv) any transfer of any of the First Party's interest in the Property. The Sale Notice shall describe the Property being sold, the desired closing date and any other relevant terms (as deemed by Second Party). Within thirty (30) days after receiving the Sale Notice from First Party, Second Party may elect (by giving First Party written notice of Second Party's intent to exercise its First Refusal Right) to purchase all of the Property at the Purchase Price, as determined pursuant to the formula set forth below (the “Election”). If Second Party makes the Election, First Party shall sell the Property to Second Party for the Purchase Price on reasonably agreeable closing terms. (b) if Second Party fails to exercise its First Refusal Right within the time period specified in the preceding paragraph, then the First Refusal Right shall B-2 automatically become null and void. Notwithstanding the foregoing, if, for any reason, First Party fails to close on the sale of the Property within twelve (12) months of the Sale Notice, its First Refusal Right shall remain in full force and effect. (c) if Second Party exercises its First Refusal Right, Second Party shall be responsible for, and pay the cost of, having a purchase agreement drafted for the Property. (d) The purchase price, payable by Second Party, pursuant to its exercise of the First Refusal Right, shall be established as follows: (1) The parties shall jointly select an appraiser to determine the purchase price, which shall be fair market value. (2) If a single appraiser cannot be agreed upon within a ten (10) day period, then each of the parties shall promptly designate in writing delivered to the other, an appraiser who has substantial experience in real estate valuation and who is unaffiliated with and otherwise unrelated to the designating party. The two appraisers shall choose a third appraiser, similarly qualified, within fifteen (15) days after their selection. If the first two appraisers do not agree upon a third within that time period, the third shall be selected by arbitration pursuant to the rules and procedures of the American Arbitration Association then in effect. Each of the three appraisers shall provide an opinion of the fair market value of the property and the purchase price shall be the average of the two (2) which are closest to each other. Each party shall bear the cost of the appraiser selected by it and one-half of the cost of the third appraiser. (e) The closing of the Second Party's purchase of the Property as contemplated by this section (the “Closing”) shall occur within one hundred eighty (180) days after the Sale Notice is given to Second Party, unless postponed or extended in writing by the parties hereto. The Closing shall take place at a mutually acceptable time and location. 3. Notices. All documents to be delivered and all correspondence and notices to be given in connection with this Agreement shall be in writing and given by personal delivery or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to First Party: [insert address and contact person] If to Second Party: Richfield Housing and Redevelopment Authority Attn: Housing Specialist 6700 Portland Avenue South Richfield, MN 55423 B-3 Each such mailed notice or communication shall be deemed to have been given to or served upon, the party to whom it is addressed on the date the same is deposited in the United States registered or certified mail, return receipt requested, postage prepaid, properly addressed in the manner above provided. Either party hereto may change such party's address for the service of notice hereunder by written notice of said change to the other party hereto, in the manner above specified ten (10) days prior to the effective date of said change. 4. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto, their respective successors and assigns. 5. Default. Should either party default in the performance of its obligations hereunder, the other party shall have and may pursue all rights and remedies available to it hereunder, at law or in equity, or otherwise, including, but not limited to, an action for damages or specific performance. 6. Time of the Essence. Time is of the essence in the performance of this Agreement. 7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall constitute one and the same agreement. 8. Governing Law. This Agreement concerns real property located in the State of Minnesota and, therefore, its validity, performance, interpretation and enforcement shall be governed by Minnesota law without giving effect to the choice of laws provisions thereof. 9. Captions. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. 10. Foreclosure or Deed in Lieu. In the event of foreclosure, or a deed in lieu of foreclosure of the First Mortgage, any provision herein or in any collateral agreement restricting the use of the Property or restricting the Borrower's ability to sell the Property, shall automatically have no further force or effect on subsequent owners or purchasers of the Property. Any person, including his successors and assigns, (other than the Borrower or related entity or person to the Borrower) receiving title to the Property through a foreclosure or deed in lieu of foreclosure of the First Mortgage shall receive title to the Property free and clear from such restriction. IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first set forth above. ____________________________ _______________________________ , _______________________________ B-4 STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___day of ____________, ______ by __________________________, _________________. ________________________________ Notary Public This instrument was drafted by: Housing & Redevelopment Authority in and for the City of Richfield, Minnesota 6700 Portland Avenue Richfield, MN 55423 C-1 EXHIBIT C DEVELOPER PRO FORMA 7208 Penn Avenue Acquisition Costs Purchase Price $146,500.00 Closing Costs on Acquisition $5,000.00 Closing Credits on Acquisition $0.00 Total Acquisition Costs $151,500.00 Construction Costs Contract Sum $82,325.00 Appliances $0.00 Light Fixtures $0.00 Contingency $5,700.00 Soft Costs (testing, survey, etc.) Building Plans $0.00 Asbestos Testing $650.00 Lead Assessment & Clearance $925.00 Radon Testing $350.00 Energy Audit Pre & Post $500.00 Well Sealing Total Construction Costs $90,450.00 Holding Costs Real Estate Taxes $2,240.70 Utilities $500.00 Insurance $1,500.00 Property Mgmt/Misc $750.00 Loan Interest (4.5%) $6,500.00 Total Holding $11,490.70 Disposition Costs Realtor Fee (5.5%) $11,825.00 TISH/Appraisal $200.00 Home Warranty $489.00 Closing Costs (1%) $2,150.00 State Deed Tax (.0034) $731.00 Seller-Paid Costs - 3% $0.00 Developer Fee - 8% $21,506.86 Total Disposition Costs $36,901.86 C-2 TOTAL DEVELOPMENT COSTS $290,342.56 Resale Price $215,000.00 Gross Profit (Loss) -$75,342.56 Buyer Assistance $ 6,450.00 Total Gap -$81,792.56 AGENDA SECTION:Consent Calendar AGENDA ITEM #2.B. STAFF RE P ORT NO. 46 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: C eleste McD ermott, Housing S pecialist D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 11/14/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution authoriz ing the use of an Affordable Housing Initiative Fund loan for the acquisition of 6521 Stevens Avenue by the W est Hennepin Affordable Housing Land Trust. E X E C UT IV E S UM M ARY: The W est Hennepin Affordable Housing Land Trust (W HA HLT) rec eived an award from Hennepin County’s Affordable Housing I nitiative Fund (A HI F) to provide affordable housing in sc attered sites across suburban Hennepin County. W HAHLT has entered into a purc hase agreement with the Greater Metropolitan Housing Corporation (GMHC) to ac quire the property at 6521 Stevens Avenue, utilizing $29,000 of the allotted funding. Hennepin County requires that a City or the Housing and Redevelopment Authority (HRA) provide a resolution authorizing the use of A HI F within its c ommunity. By selling the new home to W HA HLT, the property will maintain long-term affordability through multiple owners who qualify by earning 80% of the area median income or less. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution authorizing use of an Affordable Housing Initiative Fund loan for the acquisition of 6521 S tevens Avenue by the W est Hennepin Affordable Housing Land Trust. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT I n J anuary 2017, GMHC purchased the vac ant property at 6521 Stevens Avenue utilizing Community Development Block Grant (C D BG) funds. The home has been rehabilitated using C D B G funds and must be sold to an income-qualified buyer. Upon purchase of 6521 Stevens Avenue, W HAHLT will retain ownership of the land in perpetuity and sell the structure to a qualifying buyer (land trust). A HI F requires recipients to serve households earning less than 80 percent of the Twin Cities Area Median I nc ome (TC A MI ). B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): A goal of the C ity’s Comprehensive P lan is to ensure suffic ient diversity in the housing stock to provide for a range of household sizes, inc ome levels and needs through the following polic ies: P romote the development of a balanced housing stoc k that is available to a range of income levels. P romote the development, management and maintenance of affordable housing in the City through assistanc e programs; alternative funding sources; and the c reation of partnerships whose mission is to promote low to moderate inc ome housing. The HRA has partnered with W HA HLT in the past to provide long-term affordable housing opportunities on a sc attered-site basis. C.C R IT IC AL T IMIN G ISSU E S: Closing on the property is scheduled for December 12, 2017. D.F IN AN C IAL IMPAC T: GMHC used C D B G funds to purc hase the property, whic h requires that the home be sold to a household earning less than 80 percent of the TC A MI . W HA HLT is requesting authorization to use $29,000 of A HI F towards the acquisition of this property. E.L E GAL C ON S ID E R AT ION : The resolution is required by Hennepin County before A HI F funds c an be used. ALT E R N AT IV E R E C O MME N D AT IO N(S): Do not adopt the resolution authorizing the use of A HI F funds for the acquisition of 6521 Stevens Avenue. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter 112017 6521 Stevens AHIF HRA RESOLUTION NO. ____ RESOLUTION AUTHORIZING THE USE OF AN AFFORDABLE HOUSING INCENTIVE FUND LOAN FOR THE PURCHASE OF 6521 STEVENS AVENUE WHEREAS, Hennepin County Housing and Redevelopment Authority (HCHRA) in Resolution No. 6-HCHRA-0019 has approved the use of a $29,000 Affordable Housing Incentive Fund loan for the 6521 Stevens Avenue project, contingent upon the Richfield Housing and Redevelopment Authority’s consent to the HCHRA’s participation in the project; and WHEREAS, the 6521 Stevens Avenue project will increase/preserve the supply of affordable housing in the City of Richfield by providing one affordable single-family home; and WHEREAS, the loan from the HCHRA will complete the financing required for the project to proceed. BE IT RESOLVED, that the participation of the Hennepin County Housing and Redevelopment Authority in the project is hereby approved. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of November, 2017. ________________________ Mary B. Supple, Chair ATTEST: _______________________________ , Secretary AGENDA SECTION:Consent Calendar AGENDA ITEM #2.C. STAFF RE P ORT NO. 47 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: C eleste McD ermott, Housing S pecialist D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 11/14/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution accepting contributions for the 2017 Tour of Remodeled Homes. E X E C UT IV E S UM M ARY: The Community Development D epartment solicited financial sponsorship for the 2017 Renovation Celebration: Tour of Remodeled Homes in Ric hfield (Tour). Six sponsors donated $200 each to sponsor the Tour. The funds were used to provide gift cards to participating homeowners and for marketing expenses. State law requires the Housing & Redevelopment Authority (HRA) to accept the funds by resolution. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution allowing the acceptance of monetary support solicited for the 2017 Tour of Remodeled H omes. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT A tour of remodeled homes was held on Oc tober 7, 2017. Six homes were open to the public from 1:00 to 5:00 p.m. Over 400 people attended the tour to learn about the remodeling projec ts from the homeowners, builders, and architec ts. I nformation about HRA housing programs, and how various projec ts impact a home’s value, was also provided. The C enter for Energy and Environment, E.J . Hansen A I A, Mortgage Capital, Parsley Builders, Sicora Design/Build, and Steve Sc hneeberger of Keller W illiams Realty participated in the tour and provided $200 to be a tour sponsor. They were present at the tour and their names and logos were part of marketing materials. The funds were used to defray marketing expenses for the tour and to provide gift c ards to the six homeowners for participating. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The tour was part of the HRA’s housing marketing plan that was adopted in 2014. The tour highlighted investment in the local housing stoc k and offered information on the HRA’s remodeling programs. C.C R IT IC AL T IMIN G ISSU E S: A resolution acc epting the donations needs to be passed before the end of the 2017 calendar year. D.F IN AN C IAL IMPAC T: The HRA received $1,200 in donations towards tour expenses. Two lenders, three designers/builders, and one realtor donated $200 eac h to sponsor the tour. E.L E GAL C ON S ID E R AT ION : Minnesota Statute 465.03 requires that every acc eptance of a grant or devise of real or personal property on terms prescribed by the donor be made by resolution. ALT E R N AT IV E R E C O MME N D AT IO N(S): Direct staff to return the donations to the donors. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter RESOLUTION NO. RESOLUTION AUTHORIZING RICHFIELD COMMUNITY DEVELOPMENT DEPARTMENT TO ACCEPT DONATIONS FROM THE LISTED BUSINESSES FOR DESIGNATED USES WHEREAS, the Community Development Department received checks from the following for the 2017 Renovation Celebration: Tour of Remodeled Homes; Center for Energy and Environment E.J. Hansen, AIA Mortgage Capital Parsley Builders Sicora Design/Build Steve Schneeberger, Keller Williams Realty and, WHEREAS, Minnesota Statute requires every acceptance of a grant or devise of real or personal property on terms prescribed by the donor be made by resolution; and, WHEREAS, the donated funds will be used towards the designated events sponsored by the Community Development Department. NOW, THEREFORE, BE IT RESOLVED that the Director of Community Development will accept and distribute the donations as specified. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of November, 2017. __________________________ Mary B. Supple, Chairperson ATTEST: ___________________ , Secretary Checks Received 2017 Business Name Amount of Donation Designation Center for Energy and Environment $200.00 (used for gift cards and marketing expenses) Remodeled Home Tour E.J. Hansen, AIA $200 (used for gift cards and marketing expenses) Remodeled Home Tour Mortgage Capital $200 (used for gift cards and marketing expenses) Remodeled Home Tour Parsley Builders $200 (used for gift cards and marketing expenses) Remodeled Home Tour Sicora Design/Build $200 (used for gift cards and marketing expenses) Remodeled Home Tour Steve Schneeberger, Keller Williams Realty $200 (used for gift cards and marketing expenses) Remodeled Home Tour Total: $1,200 AGENDA SECTION:Consent Calendar AGENDA ITEM #2.D. STAFF RE P ORT NO. 48 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: Lynnette C hambers, Multifamily Housing C oordinator D E PA RTM E NT D IRE C TOR RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a proposed adjustment of payment standar d for the Section 8 Rent Assistance progr am. E X E C UT IV E S UM M ARY: The Section 8 program is administered in acc ordance with the Housing and Redevelopment Authority ’s (HRA) Administrative Plan. Acc ording to the plan and the D epartment of Housing and Urban Redevelopment (HUD) regulation, the voucher program provides financ ial assistance based on unit bedroom size. Clients pay a minimum of 30 perc ent of their income towards rent. On an annual basis HUD establishes a Fair Market Rent (FMR). The allowable F MR is expressed as a specific percentile point within the rent distribution of standard-quality rental housing units. I ndividual HRA’s are allowed to select a payment standard within 90% to 110% of HUD’s F MR. The selection of the payment standard should assure that a suffic ient supply of rental housing is available to program participants. The Richfield HRA c onducts a rental survey on an annual basis to help in determining an appropriate pay ment standard. C urrently, the survey results indic ate that the Richfield HRA should adopt a payment standard that is 100% or more of the F MR established by HUD. The new payment standards are effective J anuary 1, 2018. The attac hed table clarifies the c hanges being proposed. The last adjustment made by the HRA was in December 1, 2015. RE C O M M E ND E D AC T IO N: By motion: Approve the attached adjustment of payment standard for the Section 8 Rent Assistance program. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT See Exec utive Summary. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The HRA must approve increases in the pay ment standard for the Section 8 program. Sec tion 8 partic ipants will be able to c hoose from a larger selection of affordable housing units and may rec eive some immediate rent relief on a c ase by case basis. HUD provides suffic ient federal assistance to c over these adjustments in the payment standards and has approved the inc rease. W ithout an increase in the payment standard many Section 8 partic ipants will be unable to find housing and keep up with changing rents. Potential changes in Federal law impact the financ ial resources available to the program if the HRA does not remain current with the F MR. C.C R IT IC AL T IMIN G ISSU E S: N/A D.F IN AN C IAL IMPAC T: An inc rease in the pay ment standard will dec rease the rent burden for S ec tion 8 partic ipants. HUD provides suffic ient funding to c over the increase. E.L E GAL C ON S ID E R AT ION : The c ontrac t between the HRA and HUD provides for F MR adjustments in ac cordanc e with federal regulations. ALT E R N AT IV E R E C O MME N D AT IO N(S): Do not change the payment standard at this time; however, HUD guidelines suggest an adjustment is needed. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: N/A AT TAC H ME N TS : D escripti on Type P ayment S tandard Increase B ackup Materi al Attachment A Current Payment Standard O BDR 1 BDR 2 BDR 3 BDR 4 BDR 5 BDR 660 850 1070 1470 1725 1860 Payment Standard Proposed – Effective January 1, 2018 O BDR 1 BDR 2 BDR 3 BDR 4 BDR 5 BDR 710 890 1110 1500 1755 1890 AGENDA SECTION:RESOLUTIONS AGENDA ITEM #4. STAFF RE P ORT NO. 49 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: Melissa P oehlman, A sst. C ommunity D evelopment D irector D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 11/14/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, C ity Manager 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of resolutions adopting a modification to the Redevelopment Plan for the Richfield Redevelopment Project Area, a modification to the Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District, establishing Tax Increment Financing District 2017-1 (The Chamber lain) within the Richfield Redevelopment Project Area, and adopting a Tax Increment Financing Plan therefor. E X E C UT IV E S UM M ARY: On September 26, 2017 the C ounc il approved plans for The Chamberlain, a multi-family housing development on the city 's east side that also inc ludes a two-block extension of Ric hfield Parkway. A revised Contract for P rivate Development (Agreement) with Chamberlain Apartments LLC (Developer) was approved by the HRA on Oc tober 16, 2017. This Agreement c alls for the HRA to establish Tax I nc rement Financing Distric t 2017-1 (a housing distric t) in order to facilitate redevelopment of the property and promote the development of affordable housing. The development area c urrently sits within an existing Redevelopment Tax I nc rement Financ ing (TI F) Distric t (the Cedar Avenue TI F D istrict) that was established in 2005. C ity staff, HRA TI F analysts from Ehlers, I nc., the HRA Attorney, and the developer have conc luded that a new Housing TI F D istrict would be better suited to this development. I n order to establish a new Housing TI F D istrict for the projec t, the 31 parcels within the project area must be removed from the existing C edar Avenue TI F District. The TI F Plan estimates the generation of up to $25,586,527 of Tax I ncrement (see page 2-5 of the attached TI F Plan). This money will be available to reimburse the developer for "TI F Qualified Expenses." The Planning C ommission is sc heduled to consider the proposed TI F Distric t's complianc e with the Comprehensive P lan on November 27 and the C ity Council will hold a public hearing to c onsider establishment the D istrict on November 28. RE C O M M E ND E D AC T IO N: By motion: Approve resolutions adopting a modification to the Redevelopment Plan for the Richfield Redevelopment P roject Area, a modification to the Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing D istrict, establishing Tax Increment Financing District 2017-1 (The Chamberlain) within the R ichfield Redevelopment Project Area, and adopting a Tax Increment Financing Plan therefor. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT A 1999/2000 study, commissioned by the City of Richfield and the Metropolitan Airports Commission (MA C ), conc luded that many of the structures in this area, inc luding all single-family homes, were not c apable of withstanding the negative impacts of low frequency noise. As a result of the study, this area was identified as a Redevelopment A rea in 2000. I n Oc tober 2015, the HRA entered into a preliminary agreement with I nland D evelopment Partners to develop a multi-family housing project in this area. After two years of work, final development plans for The Chamberlain project and a Contract for Private Development were approved in S eptember and October of this y ear. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The HRA must take action to approve a modification to the Richfield Redevelopment Project Area Redevelopment Plan, a modification to the TI F Plan for the Cedar Avenue TI F Distric t, and to establish the 2017-1 Tax I nc rement Financing Distric t and its Plan. C.C R IT IC AL T IMIN G ISSU E S: The C ity Council is scheduled to hold a public hearing on the proposed modific ation to the Richfield Redevelopment Project A rea Redevelopment Plan, a modific ation to the TI F Plan for the Cedar Avenue TI F D istrict, and establishment of the 2017-1 Tax I ncrement Financing District and its Plan on November 28, 2017 and will be relying, in part, on the ac tions taken by the HRA. D.F IN AN C IAL IMPAC T: The approved C ontrac t for Private D evelopment provides the developer with 90% of the available TI F over the life of the District. Ten perc ent (10%) of the TI F will be alloc ated to the HRA to reimburse it's administrative expenses in c reating the TI F District and in comply ing with regular reporting requirements and other qualified administrative costs. W ithout the money available through the TI F Distric t, this project would be unable to proc eed. E.L E GAL C ON S ID E R AT ION : HRA legal counsel has been involved in every step of this process and has reviewed the resolutions. ALT E R N AT IV E R E C O MME N D AT IO N(S): Do not approve the resolution. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: J ames Lehnhoff, Ehlers & Assoc iates J ulie E ddington, HRA Attorney AT TAC H ME N TS : D escripti on Type Resolution - Modifying C edar Avenue TIF D i strict Resolution L etter Resolution - E stablish 2017-1 TIF D istrict Resolution L etter C edar Avenue - P lan Modification E xhibit 2017-1 TIF P lan E xhibit RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY CITY OF RICHFIELD HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. __________ RESOLUTION ADOPTING THE MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE CEDAR AVENUE TAX INCREMENT FINANCING DISTRICT WITHIN THE RICHFIELD REDEVELOPMENT PROJECT AREA. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Richfield Housing and Redevelopment Authority (the "HRA") and the City of Richfield (the "City") that the HRA adopt the Modification to the Tax Increment Financing Plan (the "TIF Plan Modification") for the Cedar Avenue Tax Increment Financing District (the "District"), pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, and Sections 469.174 to 469.1794, inclusive, as amended (the "Act"), as well as Minnesota Laws 2005, Chapter 152, Article 2, Section 25 and Minnesota Laws 2017, First Special Session, Chapter 1, Article 6, Section 18, all as reflected in the TIF Plan Modification and presented for the Board's consideration; and WHEREAS, the proposed TIF Plan Modification will remove 31 parcels from the District and extend the duration of the District; WHEREAS, the HRA has investigated the facts relating to the TIF Plan Modification and has caused the TIF Plan Modification to be prepared; and WHEREAS, the HRA has performed all actions required by law to be performed prior to the adoption of the TIF Plan Modification. The HRA has also requested the City Planning Commission to provide for review of and written comment on the TIF Plan Modification and that the Council schedule a public hearing on the TIF Plan Modification upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: 1. The HRA hereby reaffirms that the District as modified herein is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, subd. 10 and finds that the TIF Plan Modification conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is already built up and that the adoption of the proposed TIF Plan Modification will help provide employment opportunities in the State and in the preservation and enhancement of the tax base of the City and the State because it will discourage commerce and industry from moving their operations to another state or municipality and thereby serves a public purpose. 2. The HRA reaffirms the original findings that the proposed development would not occur solely through private investment within the reasonably foreseeable future, that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District as permitted by the TIF Plan Modification, that the TIF Plan Modification conforms to the general plan for the development or redevelopment of the City as a whole; and that the TIF Plan Modification will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the TIF Plan Modification, as presented to the HRA on this date, is hereby approved, established and adopted and shall be placed on file in the office of the Community Development Director. 4. Upon approval of the TIF Plan Modification by the City Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the TIF Plan Modification and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the TIF Plan Modification does not constitute approval of any project or a Development Agreement with any developer. 5. Upon approval of the TIF Plan Modification by the City Council, the Community Development Director is authorized and directed to forward a copy of the TIF Plan Modification to the Minnesota Department of Revenue and Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. 6. The Community Development Director is authorized and directed to forward a copy of the TIF Plan Modification to the Hennepin County Director of Resident and Real Estate Services in accordance with Minnesota Statutes 469.177. Approved by the Board of Commissioners of the Richfield Housing and Redevelopment Authority this 20th day of November, 2017. _______________________________ Chair ATTEST: __________________________ Secretary RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY CITY OF RICHFIELD HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. __________ RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 2017-1 (THE CHAMBERLAIN) THEREIN, AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Richfield Housing and Redevelopment Authority (the "HRA") and the City of Richfield (the "City") that the HRA adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for the Richfield Redevelopment Project Area (the "Project Area") and establish Tax Increment Financing District No. 2017-1 (The Chamberlain) (the "District") and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, and Sections 469.174 to 469.1794, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the HRA has performed all actions required by law to be performed prior to the adoption of the Plans. The HRA has also requested the City Planning Commission to provide for review of and written comment on Plans and that the Council schedule a public hearing on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: 1. The HRA hereby finds that the District is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 11, and finds that the adoption of the proposed Plans conform in all respects to the requirements of the Act, will help fulfill a need to develop an area of the State of Minnesota for affordable and high quality housing, assist in the enhancement of the tax base of the City and the State, thereby serving a public purpose. 2. The HRA further finds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. The boundaries of the Project Area are not being expanded. 4. The reasons and facts supporting the findings in this resolution are described in the Plans. 5. The HRA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. It is not anticipated that the District will contain commercial/industrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. 6. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, as presented to the HRA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Executive Director of the HRA. 7. Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. 8. Upon approval of the Plans by the City Council, the Executive Director of the HRA is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. 9. The Executive Director of the HRA is authorized and directed to forward a copy of the Plans to the Hennepin County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. Approved by the Board on November 20, 2017. _______________________________ Chair ATTEST: __________________________ Secretary As of October 23, 2017 Draft for HRA Modification to the TAX INCREMENT FINANCING PLAN for the THE CEDAR AVENUE TAX INCREMENT FINANCING DISTRICT (a redevelopment district) within THE RICHFIELD REDEVELOPMENT PROJECT AREA RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY CITY OF RICHFIELD HENNEPIN COUNTY STATE OF MINNESOTA Adopted: September 26, 2006 Modification No. 1 Public Hearing: November 28, 2017 Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com TABLE OF CONTENTS (for reference purposes only) SECTION I - TAX INCREMENT FINANCING PLAN FOR THE CEDAR AVENUE TAX INCREMENT FINANCING DISTRICT ............ 1-1 Subsection 1-1. Foreword............................................... 1-1 Subsection 1-2. Statutory Authority........................................ 1-1 Subsection 1-3. Statement of Objectives ................................... 1-1 Subsection 1-4. Redevelopment Plan Overview .............................. 1-1 Subsection 1-5. Description of Property in the District and Property To Be Acquired . 1-2 Subsection 1-6. Classification of the District................................. 1-2 Subsection 1-7. Duration of the District..................................... 1-3 Subsection 1-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ................ 1-3 Subsection 1-9. Sources of Revenue/Bonded Indebtedness .................... 1-4 Subsection 1-10. Uses of Funds ........................................... 1-5 Subsection 1-11. Fiscal Disparities Election.................................. 1-6 Subsection 1-12. Business Subsidies....................................... 1-7 Subsection 1-13. County Road Costs ....................................... 1-8 Subsection 1-14. Estimated Impact on Other Taxing Jurisdictions ................. 1-8 Subsection 1-15. Supporting Documentation ................................ 1-10 Subsection 1-16. Definition of Tax Increment Revenues ....................... 1-11 Subsection 1-17. Modifications to the District................................ 1-11 Subsection 1-18. Administrative Expenses .................................. 1-12 Subsection 1-19. Limitation of Increment ................................... 1-12 Subsection 1-20. Use of Tax Increment .................................... 1-13 Subsection 1-21. Excess Increments ...................................... 1-14 Subsection 1-22. Requirements for Agreements with the Developer .............. 1-14 Subsection 1-23. Assessment Agreements ................................. 1-14 Subsection 1-24. Administration of the District ............................... 1-14 Subsection 1-25. Annual Disclosure Requirements ........................... 1-15 Subsection 1-26. Reasonable Expectations ................................. 1-15 Subsection 1-27. Other Limitations on the Use of Tax Increment . ................ 1-15 Subsection 1-28. Summary.............................................. 1-16 APPENDIX A PROJECT DESCRIPTION ................................................ A-1 APPENDIX B MAP(S) OF THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE DISTRICT ..................................................................... B-1 APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT............. C-1 APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT .............................. D-1 APPENDIX E MINNESOTA BUSINESS ASSISTANCE FORM ............................... E-1 APPENDIX F FINDINGS AND BUT/FOR QUALIFICATIONS ................................ F-1 APPENDIX G PRIOR IMPROVEMENTS ................................................ G-1 APPENDIX H LAWS OF MINNESOTA 2005 ................................................ H-1 SECTION I - TAX INCREMENT FINANCING PLAN FOR THE CEDAR AVENUE TAX INCREMENT FINANCING DISTRICT Subsection 1-1. Foreword The Richfield Housing and Redevelopment Authority (the "HRA"), the City of Richfield (the "City"), staff and consultants have prepared the following information to expedite the establishment of the Cedar Avenue Tax Increment Financing District (the "District"), a redevelopment tax increment financing district, located in the Richfield Redevelopment Project Area. Subsection 1-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S."), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to 469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. The HRA and City derive further statutory authority by virtue of Laws of Minnesota 2005, Chapter 152, Article 2, Section 25. This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area. (AS MODIFIED NOVEMBER 28, 2017) Pursuant to Minnesota Laws 2017, First Special Session, Chapter 1, Article 6, Section 18 (the “Special Law”), the duration of the District is being extended an additional ten years. A copy of the Special Law can be found in Appendix I. Subsection 1-3. Statement of Objectives The District currently consists of 172 parcel(s) of land and adjacent and internal rights-of-way. The District is being created to facilitate construction of approximately 350,000 sq. ft. of retail development, 600,000 sq. ft. of office space and 600 housing units in the City of Richfield. Please see Appendix A for further project information. Contracts for this have not been entered into at the time of preparation of this TIF Plan, but development is likely to occur in 2007. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Richfield Redevelopment Project Area. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Richfield Redevelopment Project Area and the District. (AS MODIFIED NOVEMBER 28, 2017) The District is being modified in order to remove 31 parcels for inclusion in Tax Increment Financing District No. 2017-1 (The Chamberlain) and to extend the duration of the District pursuant to the Special Law. Contracts for redevelopment have not been entered into at the time of preparation of this Modification, but development may occur in 2019. Please see Appendix A for further project information and background information on the District. Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-1 Subsection 1-4. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the HRA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the HRA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The HRA or City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. Subsection 1-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcel(s) listed below. See the map in Appendix B for further information on the location of the District. Parcel Numbers *See Appendix C The HRA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the HRA or City only in order to accomplish one or more of the following: storm sewer improvements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The HRA or City may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 1-6. Classification of the District The HRA and City, in determining the need to create a tax increment financing district in accordance with Laws of Minnesota 2005, Chapter 152, Article 2, Section 25. Specifically, the enacted language is as follows: Sec. 25. [CITY OF RICHFIELD; TAX INCREMENT FINANCING DISTRICT.] Subdivision 1. [AUTHORIZATION.] The City of Richfield may create a tax increment financing district consisting of an area lying west of Trunk Highway 77 extending: to 16th Avenue between Crosstown Highway 62 and 66th Street; to 17th Avenue between 66th and 69th Streets; and to 18th Avenue between 69th and 72nd Streets. The City or it's Housing and Redevelopment Authority may be the authority for the purposes of Minnesota Statutes, sections 469.174 to 469.179. Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.] The redevelopment tax increment district created pursuant to subdivision 1 is deemed to be a Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-2 redevelopment district and is subject to Minnesota Statutes, sections 469.174 to 469.179, except that: (1) expenditures for activities as defined in Minnesota Statutes, section 469.1763, subdivision 1, paragraph (b), anywhere in the district are deemed to be the costs of correcting conditions that allow the designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10; and (2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not apply. [EFFECTIVE DATE.] This section received local approval by the City of Richfield on June 28, 2005 in compliance with Minnesota Statutes, section 645.021. Pursuant to M.S., Sections 469.176 Subd. 7, the District does not contain any parcel or part of a parcel that qualified under the provisions of M.S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 1-7. Duration of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b, the duration of the District will be 25 years after receipt of the first increment by the HRA or City (a total of 26 years of tax increment). The date of receipt by the City of the first tax increment is expected to be 2008. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2033, or when the TIF Plan is satisfied. If increment is received in 2009, the term of the District will be 2034. The HRA or City reserves the right to decertify the District prior to the legally required date. (AS MODIFIED NOVEMBER 28, 2017) Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b, the duration of the District will be 25 years after receipt of the first increment by the City (a total of 26 years of tax increment). Pursuant to the Special Law, the duration of District is being extended an addition ten years (for a total of 36 years of increment). The date of receipt by the City of the first increment was in 2008. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after December 31, 2043, or when the TIF Plan is satisfied. The City reserves the right to decertify the District prior to the legally required date. Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-3 Subsection 1-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2006 for taxes payable 2007. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2008) the amount by which the original value 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; 3. Change due to adjustments, negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the HRA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2007, assuming the request for certification is made before June 30, 2007. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Richfield Redevelopment Project Area, upon completion of the project, will annually approximate tax increment revenues as shown in the following table. The HRA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2008. The Project Tax Capacity (PTC) listed is an estimate of values when the project is completed. WATERSHED DISTRICT NO. 0 Project Estimated Tax Capacity upon Completion (PTC) $4,159,167 Original Estimated Net Tax Capacity (ONTC) $524,969 Fiscal Disparities Reduction $862,825 Estimated Captured Tax Capacity (CTC) $2,771,373 Original Local Tax Rate 1.07715 Pay 2006 Estimated Annual Tax Increment (CTC x Local Tax Rate) $2,985,184 Percent Retained by the HRA 100% Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-4 WATERSHED DISTRICT NO. 3 Project Estimated Tax Capacity upon Completion (PTC) $831,833 Original Estimated Net Tax Capacity (ONTC) $143,105 Fiscal Disparities Reduction $163,557 Estimated Captured Tax Capacity (CTC) $525,171 Original Local Tax Rate 1.087870 Pay 2006 Estimated Annual Tax Increment (CTC x Local Tax Rate) $571,318 Percent Retained by the HRA 100% Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District has found building permits that were issued in the past 18 months prior to the public hearing. Please see Appendix H for the building permits that were issued. Subsection 1-9. Sources of Revenue/Bonded Indebtedness Public improvement costs, acquisition, relocation, utilities, parking facilities, streets and sidewalks, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The HRA or City reserves the right to use other sources of revenue legally ap- plicable to the HRA or City and the TIF Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contribu- tions from the developer and investment income, to pay for the estimated public costs. The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF Plan. As presently proposed, the project will be financed by a bond issue/pay-as-you-go note/interfund loan/transfer. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness, including a general obligation (GO) TIF bond, or other indebtedness related to the use of tax increment financing will not exceed $40,000,000 without a modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated that $200,000 in interfund loans will be financed with tax increment revenues. It is estimated that $ 40,000,000 in bonded debt/loan proceeds will be financed with tax increment revenues. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The HRA or City may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a developer. Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-5 The estimated sources of funds for the District are contained in the table below. SOURCES OF FUNDS TOTAL Tax Increment $88,000,000 PROJECT REVENUES $88,000,000 Interfund Loans $200,000 Bond Principal $10,000,000 TIF Note Principal $30,000,000 The other financing sources list above is included for purposes of OSA reporting for the TIF District. It is not intended to be cumulative. Transfers are included in case money is moved from one fund to another before an expenditure. Subsection 1-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate construction of approximately 350,000 sq. ft. of retail development, 600,000 sq. ft. of office space and 600 housing units. The HRA and City have determined that it will be necessary to provide assistance to the project for certain costs. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF FUNDS TOTAL Land/Building Acquisition $21,940,000 Site Improvements/Preparation $3,640,000 Public Utilities $3,640,000 Public Parking Facilities $3,640,000 Streets and Sidewalks $3,640,000 Interest $42,700,000 Administrative Costs (up to 10%) $8,800,000 PROJECT COSTS TOTAL $88,000,000 Interfund Loans $200,000 Bond Principal $10,000,000 TIF Note Principal $30,000,000 The other financing uses listed above is included for purposes of OSA reporting for the TIF District. It is not intended to be cumulative. Transfers are included in case money is moved from one fund to another before an expenditure. TIF is expected to be used for the project cos ts listed above, which is a not-to-exceed budget Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-6 rather than an expected budget of costs. Pursuant to M.S., Section 469.175, Subd. 1 (5), it is estimated that the cost of improvements, including administrative expenses which will be paid or financed with tax increments, will equal $88,000,000. For purposes of OSA reporting forms, it is estimated that the cost of improvements, including financing which will be paid for with tax increment will equal $128,200,000 as is presented in the budget above. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of the Richfield Redevelopment Project Area, (including administrative costs, which are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan. Subsection 1-11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the HRA or City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are followed, the following method of computation shall apply: (1) The original net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal disparity commercial-industrial net tax capacity increase between the original year and the current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section 276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditor shall exclude the retained captured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. The HRA will choose to calculate fiscal disparities by clause b. According to M.S., Section 469.177, Subd. 3: (c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-7 Subsection 1-12. Business Subsidies Pursuant to M.S. Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $25,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers' compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature. (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $75,000 or less; and (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. The HRA will comply with M.S., Section 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. (AS MODIFIED NOVEMBER 28, 2017, TO INCLUDE LANGUAGE IN CURRENT LAW) Pursuant to M.S., Section 116J.993, Subd. 3, the following two items related to what is considered a business subsidy were increased from $75,000 to $150,000: Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-8 (1) A business subsidy of less than $150,000; (21) Business loans and loan guarantees of $150,000 or less; In addition, an additional form of financial assistance is not considered a business subsidy: (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100. The HRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions in this Subsection. Subsection 1-13. County Road Costs Pursuant to M.S., Section 469.175, Subd. 1a, the county board may require the HRA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the HRA or City within forty- five days of receipt of this TIF Plan. The HRA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 1-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the HRA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: IMPACT ON TAX BASE 2005/2006Total Net Tax Capacity Estimated CapturedTax Capacity (CTC)Upon Completion Percent of CTCto Entity Total Hennepin County 1,229,390,982 3,314,080 0.2696% City of Richfield 26,793,818 3,314,080 12.3688% ISD No. 280 32,426,328 3,314,080 10.2203% Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-9 WATERSHED DISTRICT NO. 0 IMPACT ON TAX RATES 2005/2006Extension Rates Percentof Total CTC PotentialTaxes Hennepin County 0.410160 38.08% 2,771,373 1,136,706 City of Richfield 0.404970 37.60% 2,771,373 1,122,323 ISD No. 280 0.192040 17.83% 2,771,373 532,214 Other 0.069980 6.50%2,771,373 193,941 Total 1.077150 100.00%2,985,184 WATERSHED DISTRICT NO 3 IMPACT ON TAX RATES 2005/2006Extension Rates Percentof Total CTC PotentialTaxes Hennepin County 0.410160 37.70% 525,171 215,404 City of Richfield 0.404970 37.23% 525,171 212,678 ISD No. 280 0.192040 17.65% 525,171 100,854 Other 0.080700 7.42%525,171 42,381 Total 1.087870 100.00%571,318 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual 2005/Pay 2006 rate. The total net capacity for the entities listed above are based on actual Pay 2006 figures. The District will be certified under the actual 2006/Pay 2007 rates, which were unavailable at the time this TIF Plan was prepared. The cashflows assume a 1% inflation rate. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $88,000,000. (2) Probable impact of the District on city provided services and ability to issue debt. While, an impact on the District on police protection is expected, the degree of impact is uncertain. With new residents and businesses, police calls for service may increase. New development will increase vehicular traffic and additional overall demands to the call load. Even though call demand is expected to increase, the City does not expect that the proposed development, in and of itself, will necessitate new capital investment in equipment or require the City hire additional employees. The probable impact of the District on fire protection should be negligible. An increase in service calls can be expected due to the increase in the density of development; however, new buildings typically generate few calls, if any, because of superior construction and fire sprinklers. None of the existing buildings, which will be eliminated by the new development, have fire sprinkler systems. The impact of the District on Parks should be insignificant. Recreational Services has two costs associated with its operations: Program Costs and Capital Costs. Program costs are funded by user Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-10 fees. If more programs are added as a result of the District, the additional programs will be entirely funded by user fees. If Capital Costs are needed for new facilities, the District and developments within would be contributors. Therefore, it is anticipated that the District will have a negligible impact on the Department’s existing infrastructure. The District should benefit public infrastructure. There should be a net reduction in miles of public streets and a corresponding reduction in public street lighting. This reduces the maintenance costs for Public Works. Land parcels for development will generally be larger than existing land parcels. While new development will be at increased densities, the number of water and sanitary sewer lines will be reduced making for lower maintenance costs for the City. Also, the proposed development densities can be accommodated with existing capacity of the water and sanitary sewer infrastructure. The new development may require additional storm water treatment but this should be funded by the developer(s). Traffic resulting from the new development will increase over existing traffic volumes. However, both East 66th Street and the Highway 77 interchange at 66th Street have been upgraded to accommodate increased traffic volumes. The District will require a new north-south road that extends from 67th Street south to 72 nd Street to serve the new development. The new road will likely be located generally between the existing 17th and 18th Avenues, and will be designed as a parkway. Financing for the new road will be folded into financing for the new private redevelopment. The probable impact of any debt issuance within the District on the main operating fund of the city is expected to be minimal. In addition, the ability of the City to issue future debt will not be affected by the creation of this TIF District. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same is $16,459,768; (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is $35,154,860; (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 1-15. Supporting Documentation Pursuant to M.S. Section 469.175 Subd 1, clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the Authority's findings: Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-11 • Cedar Avenue Corridor Redevelopment Concept Master Plan, JLG Architects, September 2004 • Acoustical Construction - Baseline Measurements, Orfield Laboratories, Inc., December 30, 2004 • Acoustical Construction Criteria, Orfield laboratories, Inc., January 13, 2005 • Acoustical Construction Criteria, Orfield Laboratories, Inc., May 18, 2005 • Roadway and Transit Assessment of Cedar Avenue Corridor Transit Oriented Development, WSB & Associates, Inc., January 10, 2005 • Legislative Summary 2005, John Choi, Kennedy & Graven, Chartered • House Research Summary 2005, Joel Michael, House Research Subsection 1-16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the Authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993; and 6. The market value homestead credit paid to the Authority under M.S., Section 273.1384. Subsection 1-17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City; 5. Increase in the estimate of the cost of the project, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the HRA or City, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S. Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, paragraph (a), clauses (1) to (5), must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-12 eliminated from the District. The HRA or City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 1-18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the HRA or City, other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the project; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the project; or 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 1-19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-13 if, after four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to M.S., Section 469.177, 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 authority 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 authority 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 authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by approximately September, 2010 and report such actions to the County Auditor. (AS MODIFIED NOVEMBER 28, 2017, TO INCLUDE LANGUAGE IN CURRENT LAW) In 2009 M.S., Section 469.176, Subd. 6 was amended to include Subd 6(b) which reads: For districts which were certified on or after January 1, 2005, and before April 20, 2009, the four-year period under paragraph (a) is increased to six years. This District was certified on May 21, 2007. Since it meets the requirement of the updated language in the law, the new date by which qualifying activities must take place on or adjacent to any parcel in the District is May 2013. Subsection 1-20. Use of Tax Increment The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. To finance, or otherwise pay public redevelopment costs of the Richfield Redevelopment Project Area pursuant to the M.S., Sections 469.001 to 469.047; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the HRA or City or for the benefit of the Richfield Redevelopment Project Area by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-14 the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for HRA or City administration (up to 10 percent) and the costs of public improvement activities outside the District. Subsection 1-21. Excess Increments Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The HRA or City must spend or return the excess increments under paragraph (c) within nine months after the end of the year. In addition, the HRA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in the Richfield Redevelopment Project Area or the District. Subsection 1-22. Requirements for Agreements with the Developer The HRA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the development with City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the HRA or City concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the HRA or City should the development or redevelopment not be completed. Subsection 1-23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-15 value of the land and completed improvements for the duration of the 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 County Assessor shall also certify the minimum market value agreement. Subsection 1-24. Administration of the District Administration of the District will be handled by the Community Development Director. Subsection 1-25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subd. 5, 6, and 6b the HRA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 1-26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness of the feasibility of developing the project site. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 1-27. Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Richfield Redevelopment Project Area pursuant to the M.S., Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-16 activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of the District. 3. Five Year Limitation on Commitment of Tax Increments. Pursuant to Laws of Minnesota 2005, Chapter 152, Article 2, Section 25 Subd 2: (2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not apply. 4. Redevelopment District. Pursuant to Laws of Minnesota 2005, Chapter 152, Article 2, Section 25 Subd 2: (1) expenditures for activities as defined in Minnesota Statutes, section 469.1763, subdivision 1, paragraph (b), anywhere in the district are deemed to be the costs of correcting conditions that allow the designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10; Subsection 1-28. Summary The Richfield Housing and Redevelopment Authority is establishing the District to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113, telephone (651) 697-8500. Richfield HRA Tax Increment Financing Plan for the Cedar Avenue Tax Increment Financing District 1-17 APPENDIX A PROJECT DESCRIPTION In 1996, the Minnesota State Legislature made a decision that the Minneapolis-St. Paul International airport (MSP) would remain and expand at its current location. Expansion included the construction of a new North/South Runway, and independent studies confirmed that the noise from this runway - believed to be the closest that any similar runway has been built to an existing residential area in the country - would be incompatible with the adjacent predominantly residential land uses. Based on decibel level studies, the City identified a redevelopment area which essentially included land bounded by Highway 62 to the north, Interstate 494 to the south, Highway 77 to the east, and 16th Avenue to the west. In 1999, a redevelopment plan was created. (See Subsection 2-15). Since that time, additional sound studies completed in 2000 revised the noise impact area to include land bounded by Highway 62 to the north, 72nd Street to the south, Highway 77 to the east, and a jogged profile from approximately 16th Avenue at the north end of the site to 18th Avenue at the south end. (See Subsection 2-15). Expansion work at the Minneapolis-St. Paul Airport has presented tremendous challenges and opportunities for the City of Richfield. The construction of a new north-south runway at the westernmost area of the airport site and its resulting low-frequency noise levels have made it essential for the City to revision its eastern edge. The existing land-use, essentially single family residential, is no longer an appropriate neighbor for the airport. These challenges have given rise to opportunities for development that serve the future of the City of Richfield and help to mitigate the problems caused by the airport expansion. JLG Architects was contracted in 2004 to prepare a new land-use master plan based on these new parameters. In 2005 WSB & Associates, Inc. prepared a Roadway and Transit Assessment that suggests the overall proposed redevelopment is anticipated to consist of the following primary components: • Approximately 350,000 square feet of new retail development • Approximately 600,000 square feet of new office space • Approximately 600 new housing units After completing various financial feasability models it was determined that Tax Increment Financing was needed to make the project feasible. Also in 2005 the City of Richfield requested and received special Tax Increment Financing legislation for this area. (See Subsection 2-6). (AS MODIFIED NOVEMBER 28, 2017) In 2006, the City and HRA established the Cedar Avenue TIF District as a result of decisions made by the Minnesota State Legislature to keep the MSP airport in its current location, and as an effort of the City to be proactive with its redevelopment efforts. The TIF District was established to encourage new commercial and housing development instead of capital and people moving to newer developing communities. The Financial Crisis of 2007-2008 marked the start of a recession that continued into 2009. During this period and for several years following, development slowed or halted, and the type of development contemplated for the area changed. APPENDIX A-1 The Cedar Avenue TIF District received inflationary increment in the first year starting the term of the District. Market values then declined and increment was not generated over the past eight years. During this time the City and HRA considered multiple development proposals; however, for a variety of reasons, none of the projects moved forward. In 2013, the City issued General Obligation Improvement Bonds to acquire properties and construct Richfield Parkway (Series 2013A Bonds) in the north portion of the District. In 2017 the City of Richfield received special legislation to extend the term of the Cedar Avenue TIF District (see Appendix I). The City and HRA have not entered into an agreement, but anticipate housing and retail development in the District. It is anticipated that development may occur in 2019. APPENDIX A-2 APPENDIX B MAP(S) OF THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE DISTRICT APPENDIX B-1 71st 1/2 70th 1/2 LOGAN75th VINCENTUPTONTHOMASWASHBURNXERXESI - 494 78th 77th 76th OLIVERNEWTONMORGANSHERIDANRUSSELLQUEENPENN74th 72nd 73th 71st 69th 70th DUPONTKNOXJAMESIRVINGHUMBOLDTGIRARDFREMONTEMERSONCOLFAXBRYANTALDRICHGARFIELDGRANDHARRIETLYNDALE62nd 67th 68th 66th 65th 64th 63rd SHERIDAN1700240031002300WASHBURNXERXESVINCENTUPTONTHOMASRUSSELLQUEENPENNOLIVERNEWTONMORGANLOGANDUPONTHUMBOLDTKNOXJAMESIRVINGGIRARDEMERSONFREMONTLYNDALECOLFAXBRYANTALDRICHGARFIELDHARRIETGRAND69th 71st 72nd 73th 74th 75th 78th 70th 76th 77th COLUMBUS2nd1stSTEVENSPLEASANTPILLSBURYBLAISDELLWENTWORTHNICOLLET3rdCLINTON4th5thPORTLANDOAKLANDPARK10th11th12th13th14thELLIOTCHICAGO15th16th17th18thCEDARBLOOMINGTON62nd 63rd 64th 65th 67th 68th 66thCOLUMBUSPLEASANTPILLSBURYWENTWORTHBLAISDELLSTEVENSNICOLLET1st2nd5thCLINTON3rd4thOAKLANDPARKPORTLAND15th11thCHICAGOELLIOT10th13th12th14thBLOOMINGTON16th17thCEDAR18th 1900800900100011001200130018006005004003002005010012420030032440050062070072080090010001100130014001500160017001800100152419006001200000700140029002800270026002500220021002000300015001600´ 07/13/0602,300 4,600 6,900 9,2001,150 Feet RICHFIELD REDEVELOPMENT PROJECT AREA Cedar Corridor Tax Increment Financing District Redevelopment Project Area Cedar Corridor Tax Increment Financing District APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed below. PARCEL ADDRESS 2502824320001 6733 CEDAR AVE S 2502824330054 6841 CEDAR AVE S 2502824330055 6839 CEDAR AVE S 2502824330056 6833 CEDAR AVE S 2502824330057 6829 CEDAR AVE S 2502824330058 6825 CEDAR AVE S 2502824330059 6821 CEDAR AVE S 2502824330060 6813 CEDAR AVE S 2502824330061 6809 CEDAR AVE S 2502824330062 6801 CEDAR AVE S 2602824110002 6300 18TH AVE S 2602824110033 6309 16TH AVE S 2602824110034 6315 16TH AVE S 2602824110035 6321 16TH AVE S 2602824110036 6327 16TH AVE S 2602824110037 6333 16TH AVE S 2602824110038 6339 16TH AVE S 2602824110039 6345 16TH AVE S 2602824110040 6344 17TH AVE S 2602824110041 6338 17TH AVE S 2602824110042 6332 17TH AVE S 2602824110043 6326 17TH AVE S 2602824110044 6320 17TH AVE S 2602824110045 6314 17TH AVE S 2602824110062 6309 18TH AVE S 2602824140001 6541 16TH AVE S 2602824140002 6509 16TH AVE S 2602824140003 6501 16TH AVE S 2602824140004 6401 16TH AVE S 2602824140005 6409 16TH AVE S 2602824140006 6415 16TH AVE S 2602824140007 6421 16TH AVE S 2602824140008 6427 16TH AVE S 2602824140009 6433 16TH AVE S 2602824140010 6439 16TH AVE S 2602824140011 6445 16TH AVE S 2602824140012 6444 17TH AVE S 2602824140013 6438 17TH AVE S 2602824140014 6432 17TH AVE S 2602824140015 6426 17TH AVE S 2602824140016 6420 17TH AVE S 2602824140017 6414 17TH AVE S APPENDIX C-1 2602824140018 6408 17TH AVE S 2602824140019 6400 17TH AVE S 2602824140020 6500 17TH AVE S 2602824140021 6508 17TH AVE S 2602824140022 6514 17TH AVE S 2602824140023 6520 17TH AVE S 2602824140024 6526 17TH AVE S 2602824140025 6532 17TH AVE S 2602824140122 1620 66TH ST E 2602824140123 1614 66TH ST E 2602824410001 6607 18TH AVE S 2602824410002 660 CEDAR AVE S 2602824410063 6636 CEDAR AVE S 2602824410066 6614 18TH AVE S 2602824410067 6620 18TH AVE S 2602824410068 6626 18TH AVE S 2602824410069 6632 18TH AVE S 2602824410070 6638 18TH AVE S 2602824410071 6644 18TH AVE S 2602824410072 6645 17TH AVE S 2602824410073 6639 17TH AVE S 2602824410074 6633 17TH AVE S 2602824410075 6627 17TH AVE S 2602824410076 6621 17TH AVE S 2602824410077 6615 17TH AVE S 2602824410078 6609 17TH AVE S 2602824410079 6601 17TH AVE S 2602824410080 6700 18TH AVE S 2602824410081 6708 18TH AVE S 2602824410082 6714 18TH AVE S 2602824410083 6720 18TH AVE S 2602824410084 6726 18TH AVE S 2602824410085 6732 18TH AVE S 2602824410086 6738 18TH AVE S 2602824410087 6744 18TH AVE S 2602824410088 6745 17TH AVE S 2602824410089 6739 17TH AVE S 2602824410090 6733 17TH AVE S 2602824410091 6727 17TH AVE S 2602824410092 6721 17TH AVE S 2602824410093 6715 17TH AVE S 2602824410094 6709 17TH AVE S 2602824410095 6701 17TH AVE S 2602824410096 6700 CEDAR AVE S 2602824410097 6720 CEDAR AVE S 2602824410098 6730 CEDAR AVE S 2602824410099 6744 CEDAR AVE S 2602824410100 6745 18TH AVE S 2602824410101 6739 18TH AVE S 2602824410102 6733 18TH AVE S APPENDIX C-2 2602824410103 6727 18TH AVE S 2602824410104 6721 18TH AVE S 2602824410105 6715 18TH AVE S 2602824410106 6709 18TH AVE S 2602824410107 6701 18TH AVE S 2602824410108 1717 66TH ST E 2602824440001 6800 CEDAR AVE S 2602824440002 6808 CEDAR AVE S 2602824440003 6814 CEDAR AVE S 2602824440004 6820 CEDAR AVE S 2602824440005 6826 CEDAR AVE S 2602824440006 6832 CEDAR AVE S 2602824440007 6838 CEDAR AVE S 2602824440008 6844 CEDAR AVE S 2602824440009 6845 18TH AVE S 2602824440010 6839 18TH AVE S 2602824440011 6833 18TH AVE S 2602824440012 6827 18TH AVE S 2602824440013 6821 18TH AVE S 2602824440014 6815 18TH AVE S 2602824440015 6809 18TH AVE S 2602824440016 6801 18TH AVE S 2602824440017 6800 18TH AVE S 2602824440018 6808 18TH AVE S 2602824440019 6814 18TH AVE S 2602824440020 6820 18TH AVE S 2602824440021 6826 18TH AVE S 2602824440022 6832 18TH AVE S 2602824440023 6838 18TH AVE S 2602824440024 6844 18TH AVE S 2602824440025 6845 17TH AVE S 2602824440026 6839 17TH AVE S 2602824440027 6833 17TH AVE S 2602824440028 6827 17TH AVE S 2602824440029 6821 17TH AVE S 2602824440030 6815 17TH AVE S 2602824440031 6809 17TH AVE S 2602824440032 6801 17TH AVE S 2602824440065 6900 CEDAR AVE S 2602824440066 6908 CEDAR AVE S 2602824440067 6914 CEDAR AVE S 2602824440068 6920 CEDAR AVE S 2602824440069 6924 CEDAR AVE S 2602824440070 6932 CEDAR AVE S 2602824440073 6945 18TH AVE S 2602824440074 6939 18TH AVE S 2602824440075 6933 18TH AVE S 2602824440076 6927 18TH AVE S 2602824440077 6921 18TH AVE S 2602824440078 6915 18TH AVE S APPENDIX C-3 2602824440079 6909 18TH AVE S 2602824440080 6901 18TH AVE S 2602824440129 6938 CEDAR AVE S 3502824110001 6958 CEDAR AVE S 3502824110002 7001 18TH AVE S 3502824110003 7005 18TH AVE S 3502824110009 7000 CEDAR AVE S 3502824110010 7034 CEDAR AVE S 3502824110011 7040 CEDAR AVE S 3502824110012 7048 CEDAR AVE S 3502824110013 7100 CEDAR AVE S 3502824110014 7108 CEDAR AVE S 3502824110015 7116 CEDAR AVE S 3502824110016 7121 18TH AVE S 3502824110017 7115 18TH AVE S 3502824110018 7111 18TH AVE S 3502824110019 7105 18TH AVE S 3502824110020 7101 18TH AVE S 3502824110021 7049 18TH AVE S 3502824110022 7045 18TH AVE S 3502824110023 7039 18TH AVE S 3502824110024 7035 18TH AVE S 3502824110025 7033 18TH AVE S 3502824110026 7029 18TH AVE S 3502824110027 7025 18TH AVE S 3502824110123 7134 CEDAR AVE S 3502824110124 7145 18TH AVE S 3502824110125 7137 18TH AVE S 3502824110126 7131 18TH AVE S 3502824110127 7127 18TH AVE S APPENDIX C-4 (AS MODIFIED NOVEMBER 28, 2017) The following parcels are being removed from the District for inclusion in Tax Increment Financing District No. 2017-1 (The Chamberlain): Parcel Numbers Address Owner 26-028-24-41-0067 6620 18 th Ave S HRA 26-028-24-41-0068 6626 18 th Ave S HRA 26-028-24-41-0069 6632 18 th Ave S HRA 26-028-24-41-0070 6638 18 th Ave S HRA 26-028-24-41-0071 6644 18 th Ave S HRA 26-028-24-41-0072 6645 17 th Ave S HRA 26-028-24-41-0073 6639 17 th Ave S HRA 26-028-24-41-0074 6633 17 th Ave S HRA 26-028-24-41-0075 6627 17 th Ave S HRA 26-028-24-41-0076 6621 17 th Ave S HRA 26-028-24-41-0077 6615 17 th Ave S HRA 26-028-24-41-0080 6700 18 th Ave S HRA 26-028-24-41-0081 6708 18 th Ave S HRA 26-028-24-41-0082 6714 18 th Ave S HRA 26-028-24-41-0083 6720 18 th Ave S HRA 26-028-24-41-0084 6726 18 th Ave S HRA 26-028-24-41-0085 6732 18 th Ave S HRA 26-028-24-41-0086 6738 18 th Ave S HRA 26-028-24-41-0087 6744 18 th Ave S HRA 26-028-24-41-0096 6700 Cedar Ave S HRA 26-028-24-41-0097 6720 Cedar Ave S Cedar South Pointe LLC 26-028-24-41-0098 6730 Cedar Ave S Cedar South Pointe LLC 26-028-24-41-0099 6744 Cedar Ave S Cedar South Pointe LLC 26-028-24-41-0100 6745 18 th Ave S HRA 26-028-24-41-0101 6739 18 th Ave S HRA APPENDIX C-5 26-028-24-41-0102 6733 18 th Ave S HRA 26-028-24-41-0103 6727 18 th Ave S HRA 26-028-24-41-0104 6721 18 th Ave S HRA 26-028-24-41-0105 6715 18 th Ave S Richfield Apartments LLC 26-028-24-41-0106 6709 18 th Ave S HRA 26-028-24-41-0107 6701 18 th Ave S HRA The following are the parcels remaining in the District: 2502824320001 2502824330054 2502824330055 2502824330056 2502824330057 2502824330058 2502824330059 2502824330060 2502824330061 2502824330062 2602824110002 2602824110033 2602824110034 2602824110035 2602824110036 2602824110037 2602824110038 2602824110039 2602824110040 2602824110041 2602824110042 2602824110043 2602824110044 2602824110045 2602824110062 2602824140001 2602824140002 2602824140003 2602824140004 2602824140005 2602824140006 2602824140007 2602824140008 2602824140009 2602824140010 2602824140011 2602824140012 2602824140013 2602824140014 2602824140015 2602824140016 2602824140017 2602824140018 2602824140019 2602824140137 2602824140138 2602824140140 2602824140141 2602824410001 2602824410002 2602824410063 2602824410066 2602824410088 2602824410089 2602824410090 2602824410091 2602824410092 2602824410093 2602824410094 2602824410095 2602824410108 2602824440001 2602824440002 2602824440003 2602824440004 2602824440005 2602824440006 2602824440007 2602824440008 2602824440009 2602824440010 2602824440011 2602824440012 2602824440013 2602824440014 2602824440015 2602824440016 2602824440017 2602824440018 2602824440019 2602824440020 2602824440021 2602824440022 2602824440023 2602824440024 2602824440025 2602824440026 2602824440027 2602824440028 2602824440029 2602824440030 2602824440031 2602824440032 2602824440065 2602824440066 2602824440067 2602824440068 2602824440069 2602824440071 2602824440073 2602824440074 2602824440075 2602824440076 2602824440077 2602824440078 APPENDIX C-6 2602824440079 2602824440080 2602824440129 3502824110001 3502824110002 3502824110003 3502824110009 3502824110010 3502824110011 3502824110012 3502824110013 3502824110014 3502824110015 3502824110016 3502824110017 3502824110018 3502824110019 3502824110020 3502824110021 3502824110022 3502824110023 3502824110024 3502824110025 3502824110026 3502824110027 3502824110123 3502824110124 3502824110125 3502824110126 3502824110127 APPENDIX C-7 APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT APPENDIX C-8 9/18/2006 Page 1 of 11 CEDAR AVE TAX INCREMENT DISTRICT CITY OF RICHFIELD SUMMARY T.I.F. CASH FLOW ASSUMPTIONS District New Redevelopment District County District # Inflation Rate - Every _ Years 1.00% Pay-As-You-Go Interest Rate: 6.50% City Internal Loan Rate 4.00% Note Issued Date (Present Value Date): 01-Feb-06 Local Tax Rate - Frozen 113.5680% Pay 2006 Fiscal Disparities Election Inside Year District was certified 2006 Assumes First Tax Increment For District 2008 Year District was Modified N/A Development located in modified area N/A Assumes First Tax Increment For Dev 2009 Years of Tax Increment 26 Assumes Last Year of Tax Increment 2033 Fiscal Disparities Ratio 33.6177% Pay 2006 Fiscal Disparities Metro Wide Tax Rate 121.8020% Pay 2006 Local Tax Rate - Current 107.7150% Pay 2006 State Wide Property Tax Rate (Used for total taxes) 50.8270% Pay 2006 Market Value Tax Rate (used for total taxes) N/A Pay 2006 Commercial Industrial Class Rate 1.5%-2.0% Pay 2006 First 150,000 1.50% Over 150,000 2.00% Rental Class Rate 1.25% Pay 2006 Residential Class Rat - Under $500,000 1.00% Over $500,000 1.25% Note: 1. Tax estimates are based upon market value, construction costs and taxes per sq/ft. 2. Apartments/residential do not pay State-wide property tax or Fiscal Disparities 3. Assumes Fiscal Disparities is paid inside the district Prepared by Ehlers TIF PLAN Run- 09-18-2006 9/18/2006 Page 2 of 11 CEDAR AVE TAX INCREMENT DISTRICT CITY OF RICHFIELD SUMMARY TAX INCREMENT CASH FLOW Base Project Fiscal Captured Semi-Annual State Admin. Housing Semi-Annual Semi-Annual PAYMENT DATE PERIOD BEGINNING Tax Tax Disparities Tax Gross Tax Auditor Net Tax Present PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 10.00% 15.00% Increment Value Yrs. Mth. Yr. Present Value Date 01-Feb-06 0.0 1-Aug 2006 668,074 668,074 0 0.0 1-Feb 2006 0.0 1-Feb 2007 668,074 668,074 0 0 0 0 0 0 0 0 0.0 1-Aug 2006 0.0 1-Aug 2007 668,074 668,074 0 0 0 0 0 0 0 0 0.0 1-Feb 2007 0.0 1-Feb 2008 668,074 668,074 0 0 0 0 0 0 0 0 0.5 1-Aug 2007 0.5 1-Aug 2008 668,074 668,074 0 0 0 0 0 0 0 0 1.0 1-Feb 2008 1.0 1-Feb 2009 668,074 974,938 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 78,383 1.5 1-Aug 2008 1.5 1-Aug 2009 668,074 974,938 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 154,298 2.0 1-Feb 2009 2.0 1-Feb 2010 668,074 1,806,772 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 427,120 2.5 1-Aug 2009 2.5 1-Aug 2010 668,074 1,806,772 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 691,355 3.0 1-Feb 2010 3.0 1-Feb 2011 668,074 2,638,605 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,134,220 3.5 1-Aug 2010 3.5 1-Aug 2011 668,074 2,638,605 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,563,145 4.0 1-Feb 2011 4.0 1-Feb 2012 668,074 3,470,438 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,153,932 4.5 1-Aug 2011 4.5 1-Aug 2012 668,074 3,470,438 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,726,123 5.0 1-Feb 2012 5.0 1-Feb 2013 668,074 4,302,272 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 3,444,801 5.5 1-Aug 2012 5.5 1-Aug 2013 668,074 4,302,272 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 4,140,857 6.0 1-Feb 2013 6.0 1-Feb 2014 668,074 4,991,000 (1,103,879) 3,219,047 1,736,447 (6,251) (173,020) (259,529) 1,297,647 4,944,023 6.5 1-Aug 2013 6.5 1-Aug 2014 668,074 4,991,000 (1,103,879) 3,219,047 1,736,447 (6,251) (173,020) (259,529) 1,297,647 5,721,909 7.0 1-Feb 2014 7.0 1-Feb 2015 668,074 5,040,910 (1,116,623) 3,256,213 1,756,497 (6,323) (175,017) (262,526) 1,312,630 6,484,007 7.5 1-Aug 2014 7.5 1-Aug 2015 668,074 5,040,910 (1,116,623) 3,256,213 1,756,497 (6,323) (175,017) (262,526) 1,312,630 7,222,118 8.0 1-Feb 2015 8.0 1-Feb 2016 668,074 5,091,319 (1,129,495) 3,293,750 1,776,747 (6,396) (177,035) (265,553) 1,327,763 7,945,236 8.5 1-Aug 2015 8.5 1-Aug 2016 668,074 5,091,319 (1,129,495) 3,293,750 1,776,747 (6,396) (177,035) (265,553) 1,327,763 8,645,593 9.0 1-Feb 2016 9.0 1-Feb 2017 668,074 5,142,232 (1,142,496) 3,331,662 1,797,199 (6,470) (179,073) (268,609) 1,343,047 9,331,712 9.5 1-Aug 2016 9.5 1-Aug 2017 668,074 5,142,232 (1,142,496) 3,331,662 1,797,199 (6,470) (179,073) (268,609) 1,343,047 9,996,235 10.0 1-Feb 2017 10.0 1-Feb 2018 668,074 5,193,655 (1,155,626) 3,369,954 1,817,857 (6,544) (181,131) (271,697) 1,358,484 10,647,239 10.5 1-Aug 2017 10.5 1-Aug 2018 668,074 5,193,655 (1,155,626) 3,369,954 1,817,857 (6,544) (181,131) (271,697) 1,358,484 11,277,750 11.0 1-Feb 2018 11.0 1-Feb 2019 668,074 5,245,591 (1,168,888) 3,408,629 1,838,720 (6,619) (183,210) (274,815) 1,374,076 11,895,424 11.5 1-Aug 2018 11.5 1-Aug 2019 668,074 5,245,591 (1,168,888) 3,408,629 1,838,720 (6,619) (183,210) (274,815) 1,374,076 12,493,655 12.0 1-Feb 2019 12.0 1-Feb 2020 668,074 5,298,047 (1,182,283) 3,447,690 1,859,793 (6,695) (185,310) (277,965) 1,389,823 13,079,696 12.5 1-Aug 2019 12.5 1-Aug 2020 668,074 5,298,047 (1,182,283) 3,447,690 1,859,793 (6,695) (185,310) (277,965) 1,389,823 13,647,290 13.0 1-Feb 2020 13.0 1-Feb 2021 668,074 5,351,028 (1,195,811) 3,487,142 1,881,076 (6,772) (187,430) (281,146) 1,405,728 14,203,309 13.5 1-Aug 2020 13.5 1-Aug 2021 668,074 5,351,028 (1,195,811) 3,487,142 1,881,076 (6,772) (187,430) (281,146) 1,405,728 14,741,826 14.0 1-Feb 2021 14.0 1-Feb 2022 668,074 5,404,538 (1,209,475) 3,526,988 1,902,572 (6,849) (189,572) (284,358) 1,421,792 15,269,352 14.5 1-Aug 2021 14.5 1-Aug 2022 668,074 5,404,538 (1,209,475) 3,526,988 1,902,572 (6,849) (189,572) (284,358) 1,421,792 15,780,274 15.0 1-Feb 2022 15.0 1-Feb 2023 668,074 5,458,583 (1,223,276) 3,567,233 1,924,282 (6,927) (191,736) (287,603) 1,438,016 16,280,760 15.5 1-Aug 2022 15.5 1-Aug 2023 668,074 5,458,583 (1,223,276) 3,567,233 1,924,282 (6,927) (191,736) (287,603) 1,438,016 16,765,492 16.0 1-Feb 2023 16.0 1-Feb 2024 668,074 5,513,169 (1,237,214) 3,607,881 1,946,210 (7,006) (193,920) (290,881) 1,454,403 17,240,316 16.5 1-Aug 2023 16.5 1-Aug 2024 668,074 5,513,169 (1,237,214) 3,607,881 1,946,210 (7,006) (193,920) (290,881) 1,454,403 17,700,194 17.0 1-Feb 2024 17.0 1-Feb 2025 668,074 5,568,301 (1,251,292) 3,648,935 1,968,358 (7,086) (196,127) (294,191) 1,470,954 18,150,665 17.5 1-Aug 2024 17.5 1-Aug 2025 668,074 5,568,301 (1,251,292) 3,648,935 1,968,358 (7,086) (196,127) (294,191) 1,470,954 18,586,956 18.0 1-Feb 2025 18.0 1-Feb 2026 668,074 5,623,984 (1,265,511) 3,690,399 1,990,726 (7,167) (198,356) (297,534) 1,487,670 19,014,316 18.5 1-Aug 2025 18.5 1-Aug 2026 668,074 5,623,984 (1,265,511) 3,690,399 1,990,726 (7,167) (198,356) (297,534) 1,487,670 19,428,225 19.0 1-Feb 2026 19.0 1-Feb 2027 668,074 5,680,224 (1,279,871) 3,732,278 2,013,319 (7,248) (200,607) (300,911) 1,504,553 19,833,654 19.5 1-Aug 2026 19.5 1-Aug 2027 668,074 5,680,224 (1,279,871) 3,732,278 2,013,319 (7,248) (200,607) (300,911) 1,504,553 20,226,321 20.0 1-Feb 2027 20.0 1-Feb 2028 668,074 5,737,026 (1,294,376) 3,774,576 2,036,137 (7,330) (202,881) (304,321) 1,521,605 20,610,939 20.5 1-Aug 2027 20.5 1-Aug 2028 668,074 5,737,026 (1,294,376) 3,774,576 2,036,137 (7,330) (202,881) (304,321) 1,521,605 20,983,451 21.0 1-Feb 2028 21.0 1-Feb 2029 668,074 5,794,396 (1,309,025) 3,817,297 2,059,184 (7,413) (205,177) (307,766) 1,538,828 21,348,320 21.5 1-Aug 2028 21.5 1-Aug 2029 668,074 5,794,396 (1,309,025) 3,817,297 2,059,184 (7,413) (205,177) (307,766) 1,538,828 21,701,704 22.0 1-Feb 2029 22.0 1-Feb 2030 668,074 5,852,340 (1,323,821) 3,860,445 2,082,461 (7,497) (207,496) (311,245) 1,556,223 22,047,834 22.5 1-Aug 2029 22.5 1-Aug 2030 668,074 5,852,340 (1,323,821) 3,860,445 2,082,461 (7,497) (207,496) (311,245) 1,556,223 22,383,069 23.0 1-Feb 2030 23.0 1-Feb 2031 668,074 5,910,863 (1,338,765) 3,904,024 2,105,971 (7,581) (209,839) (314,758) 1,573,792 22,711,417 23.5 1-Aug 2030 23.5 1-Aug 2031 668,074 5,910,863 (1,338,765) 3,904,024 2,105,971 (7,581) (209,839) (314,758) 1,573,792 23,029,429 24.0 1-Feb 2031 24.0 1-Feb 2032 668,074 5,969,972 (1,353,858) 3,948,040 2,129,715 (7,667) (212,205) (318,307) 1,591,536 23,340,904 24.5 1-Aug 2031 24.5 1-Aug 2032 668,074 5,969,972 (1,353,858) 3,948,040 2,129,715 (7,667) (212,205) (318,307) 1,591,536 23,642,575 25.0 1-Feb 2032 25.0 1-Feb 2033 668,074 6,029,672 (1,369,103) 3,992,495 2,153,698 (7,753) (214,594) (321,892) 1,609,458 23,938,041 25.5 1-Aug 2032 25.5 1-Aug 2033 668,074 6,029,672 (1,369,103) 3,992,495 2,153,698 (7,753) (214,594) (321,892) 1,609,458 24,224,206 26.0 1-Feb 2033 Totals (54,332,949) 85,495,591 (307,645) (8,514,920) (12,772,380) 63,861,898 Present Value 45,943,843 (165,398) (6,624,506) (6,866,767) 24,224,206 NOTES: 1. State Auditor payment is based upon 1st half, pay 2006 actual and may increase over term of district 2. TIF run does not reflect potential reduction in Market Value Homestead Credit 3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value. 4. Inflation on tax rates cannot be captured. 5. TIF does not capture state wide property taxes or market value property taxes Prepared by Ehlers TIF PLAN Run- 09-18-2006 9/18/2006 Page 3 of 11 CEDAR AVE TAX INCREMENT DISTRICT CITY OF RICHFIELD RETAIL T.I.F. CASH FLOW ASSUMPTIONS District New Redevelopment District County District # Inflation Rate - Every _ Years 1.00% Pay-As-You-Go Interest Rate: 6.50% City Internal Loan Rate 4.00% Note Issued Date (Present Value Date): 01-Feb-06 Local Tax Rate - Frozen 107.71500% Pay 2006 Fiscal Disparities Election Inside Year District was certified 2006 Assumes First Tax Increment For District 2008 Year District was Modified N/A Development located in modified area N/A Assumes First Tax Increment For Dev 2009 Years of Tax Increment 26 Assumes Last Year of Tax Increment 2033 Fiscal Disparities Ratio 33.6177% Pay 2006 Fiscal Disparities Metro Wide Tax Rate 121.8020% Pay 2006 Local Tax Rate - Current 107.7150% Pay 2006 State Wide Property Tax Rate (Used for total taxes) 50.8270% Pay 2006 Market Value Tax Rate (used for total taxes) N/A Pay 2006 Commercial Industrial Class Rate 1.5%-2.0% Pay 2006 First 150,000 1.50% Over 150,000 2.00% Rental Class Rate 1.25% Pay 2006 Residential Class Rat - Under $500,000 1.00% Over $500,000 1.25% BASE VALUE INFORMATION Market Tax Value Capacity 0 32,594,600 396,759 Comm Retail 158,333,333 61.29% 19,977,335 1.5%-2.0% 398,797 Housing 100,000,000 38.71% 12,617,265 1.00% 126,173 Total 258,333,333 100.00%32,594,600 524,969 PROJECT INFORMATION Total Market Value Market Class New Date Date Date PHASE Use Sq. Ft./Units Sq. Ft./Units Value Rate Tax Capacity Completed Asses Payable 1 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2007 2008 2009 Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2007 2008 2009 Housing 100 200,000.00 20,000,000 1.00% 200,000 2007 2008 2009 2 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2008 2009 2010 Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2008 2009 2010 Housing 100 200,000.00 20,000,000 1.00% 200,000 2008 2009 2010 3 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2009 2010 2011 Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2009 2010 2011 Housing 100 200,000.00 20,000,000 1.00% 200,000 2009 2010 2011 4 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2010 2011 2012 Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2010 2011 2012 Housing 100 200,000.00 20,000,000 1.00% 200,000 2010 2011 2012 5 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2011 2012 2013 Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2011 2012 2013 Housing 100 200,000.00 20,000,000 1.00% 200,000 2011 2012 2013 TOTAL 792,167 258,333,333 4,159,167 Note: 1. Tax estimates are based upon market value, construction costs and taxes per sq/ft. 2. Apartments/residential do not pay State-wide property tax or Fiscal Disparities 3. Assumes Fiscal Disparities is paid inside the district Watershed Prepared by Ehlers TIF PLAN Run- 09-18-2006 9/18/2006 Page 4 of 11 CEDAR AVE TAX INCREMENT DISTRICT CITY OF RICHFIELD RETAIL TAX INCREMENT CASH FLOW Base Project Fiscal Captured Semi-Annual State Admin. Housing Semi-Annual Semi-Annual PAYMENT DATE PERIOD BEGINNING Tax Tax Disparities Tax Gross Tax Auditor Net Tax Present PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 10.00% 15.00% Increment Value Yrs. Mth. Yr. Present Value Date 01-Feb-06 0.0 1-Aug 2006 524,969 524,969 0.0 1-Feb 2006 0.0 1-Feb 2007 524,969 524,969 0 0 0 0 0 0 0 0 0.0 1-Aug 2006 0.0 1-Aug 2007 524,969 524,969 0 0 0 0 0 0 0 0 0.0 1-Feb 2007 0.0 1-Feb 2008 524,969 524,969 0 0 0 0 0 0 0 0 0.5 1-Aug 2007 0.5 1-Aug 2008 524,969 524,969 0 0 0 0 0 0 0 0 1.0 1-Feb 2008 1.0 1-Feb 2009 524,969 831,833 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 78,383 1.5 1-Aug 2008 1.5 1-Aug 2009 524,969 831,833 (78,342) 228,522 123,076 (443) (12,263) (18,395) 91,975 154,298 2.0 1-Feb 2009 2.0 1-Feb 2010 524,969 1,663,667 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 427,120 2.5 1-Aug 2009 2.5 1-Aug 2010 524,969 1,663,667 (290,749) 847,948 456,684 (1,644) (45,504) (68,256) 341,280 691,355 3.0 1-Feb 2010 3.0 1-Feb 2011 524,969 2,495,500 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,134,220 3.5 1-Aug 2010 3.5 1-Aug 2011 524,969 2,495,500 (503,157) 1,467,373 790,291 (2,845) (78,745) (118,117) 590,584 1,563,145 4.0 1-Feb 2011 4.0 1-Feb 2012 524,969 3,327,333 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,153,932 4.5 1-Aug 2011 4.5 1-Aug 2012 524,969 3,327,333 (715,565) 2,086,799 1,123,898 (4,046) (111,985) (167,978) 839,889 2,726,123 5.0 1-Feb 2012 5.0 1-Feb 2013 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 3,444,801 5.5 1-Aug 2012 5.5 1-Aug 2013 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 4,140,857 6.0 1-Feb 2013 6.0 1-Feb 2014 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 4,815,003 6.5 1-Aug 2013 6.5 1-Aug 2014 524,969 4,159,167 (927,973) 2,706,224 1,457,505 (5,247) (145,226) (217,839) 1,089,193 5,467,929 7.0 1-Feb 2014 7.0 1-Feb 2015 524,969 4,200,758 (938,593) 2,737,196 1,474,185 (5,307) (146,888) (220,332) 1,101,659 6,107,540 7.5 1-Aug 2014 7.5 1-Aug 2015 524,969 4,200,758 (938,593) 2,737,196 1,474,185 (5,307) (146,888) (220,332) 1,101,659 6,727,018 8.0 1-Feb 2015 8.0 1-Feb 2016 524,969 4,242,766 (949,320) 2,768,477 1,491,032 (5,368) (148,566) (222,850) 1,114,248 7,333,854 8.5 1-Aug 2015 8.5 1-Aug 2016 524,969 4,242,766 (949,320) 2,768,477 1,491,032 (5,368) (148,566) (222,850) 1,114,248 7,921,588 9.0 1-Feb 2016 9.0 1-Feb 2017 524,969 4,285,194 (960,154) 2,800,070 1,508,048 (5,429) (150,262) (225,393) 1,126,964 8,497,318 9.5 1-Aug 2016 9.5 1-Aug 2017 524,969 4,285,194 (960,154) 2,800,070 1,508,048 (5,429) (150,262) (225,393) 1,126,964 9,054,925 10.0 1-Feb 2017 10.0 1-Feb 2018 524,969 4,328,046 (971,096) 2,831,980 1,525,234 (5,491) (151,974) (227,961) 1,139,807 9,601,136 10.5 1-Aug 2017 10.5 1-Aug 2018 524,969 4,328,046 (971,096) 2,831,980 1,525,234 (5,491) (151,974) (227,961) 1,139,807 10,130,153 11.0 1-Feb 2018 11.0 1-Feb 2019 524,969 4,371,326 (982,148) 2,864,209 1,542,591 (5,553) (153,704) (230,556) 1,152,779 10,648,350 11.5 1-Aug 2018 11.5 1-Aug 2019 524,969 4,371,326 (982,148) 2,864,209 1,542,591 (5,553) (153,704) (230,556) 1,152,779 11,150,235 12.0 1-Feb 2019 12.0 1-Feb 2020 524,969 4,415,039 (993,310) 2,896,760 1,560,123 (5,616) (155,451) (233,176) 1,165,880 11,641,846 12.5 1-Aug 2019 12.5 1-Aug 2020 524,969 4,415,039 (993,310) 2,896,760 1,560,123 (5,616) (155,451) (233,176) 1,165,880 12,117,983 13.0 1-Feb 2020 13.0 1-Feb 2021 524,969 4,459,190 (1,004,583) 2,929,637 1,577,829 (5,680) (157,215) (235,822) 1,179,112 12,584,367 13.5 1-Aug 2020 13.5 1-Aug 2021 524,969 4,459,190 (1,004,583) 2,929,637 1,577,829 (5,680) (157,215) (235,822) 1,179,112 13,036,070 14.0 1-Feb 2021 14.0 1-Feb 2022 524,969 4,503,782 (1,015,970) 2,962,842 1,595,713 (5,745) (158,997) (238,495) 1,192,476 13,478,514 14.5 1-Aug 2021 14.5 1-Aug 2022 524,969 4,503,782 (1,015,970) 2,962,842 1,595,713 (5,745) (158,997) (238,495) 1,192,476 13,907,030 15.0 1-Feb 2022 15.0 1-Feb 2023 524,969 4,548,819 (1,027,470) 2,996,380 1,613,775 (5,810) (160,797) (241,195) 1,205,974 14,326,756 15.5 1-Aug 2022 15.5 1-Aug 2023 524,969 4,548,819 (1,027,470) 2,996,380 1,613,775 (5,810) (160,797) (241,195) 1,205,974 14,733,271 16.0 1-Feb 2023 16.0 1-Feb 2024 524,969 4,594,308 (1,039,086) 3,030,252 1,632,018 (5,875) (162,614) (243,921) 1,219,607 15,131,440 16.5 1-Aug 2023 16.5 1-Aug 2024 524,969 4,594,308 (1,039,086) 3,030,252 1,632,018 (5,875) (162,614) (243,921) 1,219,607 15,517,076 17.0 1-Feb 2024 17.0 1-Feb 2025 524,969 4,640,251 (1,050,817) 3,064,464 1,650,444 (5,942) (164,450) (246,675) 1,233,377 15,894,791 17.5 1-Aug 2024 17.5 1-Aug 2025 524,969 4,640,251 (1,050,817) 3,064,464 1,650,444 (5,942) (164,450) (246,675) 1,233,377 16,260,616 18.0 1-Feb 2025 18.0 1-Feb 2026 524,969 4,686,653 (1,062,666) 3,099,018 1,669,053 (6,009) (166,304) (249,457) 1,247,284 16,618,921 18.5 1-Aug 2025 18.5 1-Aug 2026 524,969 4,686,653 (1,062,666) 3,099,018 1,669,053 (6,009) (166,304) (249,457) 1,247,284 16,965,947 19.0 1-Feb 2026 19.0 1-Feb 2027 524,969 4,733,520 (1,074,633) 3,133,917 1,687,849 (6,076) (168,177) (252,266) 1,261,330 17,305,836 19.5 1-Aug 2026 19.5 1-Aug 2027 524,969 4,733,520 (1,074,633) 3,133,917 1,687,849 (6,076) (168,177) (252,266) 1,261,330 17,635,025 20.0 1-Feb 2027 20.0 1-Feb 2028 524,969 4,780,855 (1,086,720) 3,169,165 1,706,833 (6,145) (170,069) (255,103) 1,275,516 17,957,439 20.5 1-Aug 2027 20.5 1-Aug 2028 524,969 4,780,855 (1,086,720) 3,169,165 1,706,833 (6,145) (170,069) (255,103) 1,275,516 18,269,704 21.0 1-Feb 2028 21.0 1-Feb 2029 524,969 4,828,663 (1,098,928) 3,204,766 1,726,007 (6,214) (171,979) (257,969) 1,289,845 18,575,537 21.5 1-Aug 2028 21.5 1-Aug 2029 524,969 4,828,663 (1,098,928) 3,204,766 1,726,007 (6,214) (171,979) (257,969) 1,289,845 18,871,744 22.0 1-Feb 2029 22.0 1-Feb 2030 524,969 4,876,950 (1,111,258) 3,240,722 1,745,372 (6,283) (173,909) (260,863) 1,304,317 19,161,846 22.5 1-Aug 2029 22.5 1-Aug 2030 524,969 4,876,950 (1,111,258) 3,240,722 1,745,372 (6,283) (173,909) (260,863) 1,304,317 19,442,816 23.0 1-Feb 2030 23.0 1-Feb 2031 524,969 4,925,720 (1,123,711) 3,277,039 1,764,931 (6,354) (175,858) (263,787) 1,318,933 19,717,991 23.5 1-Aug 2030 23.5 1-Aug 2031 524,969 4,925,720 (1,123,711) 3,277,039 1,764,931 (6,354) (175,858) (263,787) 1,318,933 19,984,505 24.0 1-Feb 2031 24.0 1-Feb 2032 524,969 4,974,977 (1,136,289) 3,313,718 1,784,686 (6,425) (177,826) (266,739) 1,333,696 20,245,519 24.5 1-Aug 2031 24.5 1-Aug 2032 524,969 4,974,977 (1,136,289) 3,313,718 1,784,686 (6,425) (177,826) (266,739) 1,333,696 20,498,317 25.0 1-Feb 2032 25.0 1-Feb 2033 524,969 5,024,726 (1,148,993) 3,350,764 1,804,638 (6,497) (179,814) (269,721) 1,348,606 20,745,895 25.5 1-Aug 2032 25.5 1-Aug 2033 524,969 5,024,726 (1,148,993) 3,350,764 1,804,638 (6,497) (179,814) (269,721) 1,348,606 20,985,680 26.0 1-Feb 2033 Totals (46,439,011) 72,977,389 (262,579) (7,267,606) (10,901,409) 54,507,045 Present Value 39,555,053 (142,398) (5,762,797) (5,911,898) 20,985,680 NOTES: 1. State Auditor payment is based upon 1st half, pay 2006 actual and may increase over term of district 2. TIF run does not reflect potential reduction in Market Value Homestead Credit 3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value. 4. Inflation on tax rates cannot be captured. 5. TIF does not capture state wide property taxes or market value property taxes Prepared by Ehlers TIF PLAN Run- 09-18-2006 9/18/2006 Page 5 of 11 CEDAR AVE TAX INCREMENT DISTRICT CITY OF RICHFIELD RETAIL T.I.F. CASH FLOW ASSUMPTIONS District New Redevelopment District County District # Inflation Rate - Every _ Years 1.00% Pay-As-You-Go Interest Rate: 6.50% City Internal Loan Rate 4.00% Note Issued Date (Present Value Date): 01-Feb-06 Local Tax Rate - Frozen 108.7870% Pay 2006 Fiscal Disparities Election Inside Year District was certified 2006 Assumes First Tax Increment For District 2008 Year District was Modified N/A Development located in modified area N/A Assumes First Tax Increment For Dev 2009 Years of Tax Increment 26 Assumes Last Year of Tax Increment 2033 Fiscal Disparities Ratio 33.6177% Pay 2006 Fiscal Disparities Metro Wide Tax Rate 121.8020% Pay 2006 Local Tax Rate - Current 107.7150% Pay 2006 State Wide Property Tax Rate (Used for total taxes) 50.8270% Pay 2006 Market Value Tax Rate (used for total taxes) N/A Pay 2006 Commercial Industrial Class Rate 1.5%-2.0% Pay 2006 First 150,000 1.50% Over 150,000 2.00% Rental Class Rate 1.25% Pay 2006 Residential Class Rat - Under $500,000 1.00% Over $500,000 1.25% BASE VALUE INFORMATION Market Tax Value Capacity 3 8,919,000 108,761 Comm Retail 31,666,667 61.29% 5,466,484 1.5%-2.0% 108,580 Housing 20,000,000 38.71% 3,452,516 1.00% 34,525 Total 51,666,667 100.00%8,919,000 143,105 PROJECT INFORMATION Total Market Value Market Class New Date Date Date PHASE Use Sq. Ft./Units Sq. Ft./Units Value Rate Tax Capacity Completed Asses Payable 6 Retail 58,333 200.00 11,666,667 1.5%-2.0% 232,583 2012 2013 2014 Office 100,000 200.00 20,000,000 1.5%-2.0% 399,250 2012 2013 2014 Housing 100 200,000.00 20,000,000 1.00% 200,000 2012 2013 2014 TOTAL 158,433 51,666,667 831,833 Note: 1. Tax estimates are based upon market value, construction costs and taxes per sq/ft. 2. Apartments/residential do not pay State-wide property tax or Fiscal Disparities 3. Assumes Fiscal Disparities is paid inside the district Watershed Prepared by Ehlers TIF PLAN Run- 09-18-2006 9/18/2006 Page 6 of 11 CEDAR AVE TAX INCREMENT DISTRICT CITY OF RICHFIELD RETAIL TAX INCREMENT CASH FLOW Base Project Fiscal Captured Semi-Annual State Admin. Housing Semi-Annual Semi-Annual PAYMENT DATE PERIOD BEGINNING Tax Tax Disparities Tax Gross Tax Auditor Net Tax Present PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 10.00% 15.00% Increment Value Yrs. Mth. Yr. Present Value Date 01-Feb-06 0.0 1-Aug 2006 143,105 143,105 0.0 1-Feb 2006 0.0 1-Feb 2007 143,105 143,105 0 0 0 0 0 0 0 0 0.0 1-Aug 2006 0.0 1-Aug 2007 143,105 143,105 0 0 0 0 0 0 0 0 0.0 1-Feb 2007 0.0 1-Feb 2008 143,105 143,105 0 0 0 0 0 0 0 0 0.5 1-Aug 2007 0.5 1-Aug 2008 143,105 143,105 0 0 0 0 0 0 0 0 1.0 1-Feb 2008 1.0 1-Feb 2009 143,105 143,105 0 0 0 0 0 0 0 0 1.5 1-Aug 2008 1.5 1-Aug 2009 143,105 143,105 0 0 0 0 0 0 0 0 2.0 1-Feb 2009 2.0 1-Feb 2010 143,105 143,105 0 0 0 0 0 0 0 0 2.5 1-Aug 2009 2.5 1-Aug 2010 143,105 143,105 0 0 0 0 0 0 0 0 3.0 1-Feb 2010 3.0 1-Feb 2011 143,105 143,105 0 0 0 0 0 0 0 0 3.5 1-Aug 2010 3.5 1-Aug 2011 143,105 143,105 0 0 0 0 0 0 0 0 4.0 1-Feb 2011 4.0 1-Feb 2012 143,105 143,105 0 0 0 0 0 0 0 0 4.5 1-Aug 2011 4.5 1-Aug 2012 143,105 143,105 0 0 0 0 0 0 0 0 5.0 1-Feb 2012 5.0 1-Feb 2013 143,105 143,105 0 0 0 0 0 0 0 0 5.5 1-Aug 2012 5.5 1-Aug 2013 143,105 143,105 0 0 0 0 0 0 0 0 6.0 1-Feb 2013 6.0 1-Feb 2014 143,105 831,833 (175,906) 512,823 278,942 (1,004) (27,794) (41,691) 208,453 129,020 6.5 1-Aug 2013 6.5 1-Aug 2014 143,105 831,833 (175,906) 512,823 278,942 (1,004) (27,794) (41,691) 208,453 253,980 7.0 1-Feb 2014 7.0 1-Feb 2015 143,105 840,152 (178,030) 519,017 282,311 (1,016) (28,130) (42,194) 210,971 376,467 7.5 1-Aug 2014 7.5 1-Aug 2015 143,105 840,152 (178,030) 519,017 282,311 (1,016) (28,130) (42,194) 210,971 495,099 8.0 1-Feb 2015 8.0 1-Feb 2016 143,105 848,553 (180,175) 525,273 285,714 (1,029) (28,469) (42,703) 213,514 611,382 8.5 1-Aug 2015 8.5 1-Aug 2016 143,105 848,553 (180,175) 525,273 285,714 (1,029) (28,469) (42,703) 213,514 724,005 9.0 1-Feb 2016 9.0 1-Feb 2017 143,105 857,039 (182,342) 531,592 289,151 (1,041) (28,811) (43,217) 216,083 834,395 9.5 1-Aug 2016 9.5 1-Aug 2017 143,105 857,039 (182,342) 531,592 289,151 (1,041) (28,811) (43,217) 216,083 941,310 10.0 1-Feb 2017 10.0 1-Feb 2018 143,105 865,609 (184,530) 537,974 292,623 (1,053) (29,157) (43,735) 218,677 1,046,103 10.5 1-Aug 2017 10.5 1-Aug 2018 143,105 865,609 (184,530) 537,974 292,623 (1,053) (29,157) (43,735) 218,677 1,147,597 11.0 1-Feb 2018 11.0 1-Feb 2019 143,105 874,265 (186,741) 544,420 296,129 (1,066) (29,506) (44,259) 221,297 1,247,074 11.5 1-Aug 2018 11.5 1-Aug 2019 143,105 874,265 (186,741) 544,420 296,129 (1,066) (29,506) (44,259) 221,297 1,343,421 12.0 1-Feb 2019 12.0 1-Feb 2020 143,105 883,008 (188,973) 550,930 299,670 (1,079) (29,859) (44,789) 223,943 1,437,850 12.5 1-Aug 2019 12.5 1-Aug 2020 143,105 883,008 (188,973) 550,930 299,670 (1,079) (29,859) (44,789) 223,943 1,529,307 13.0 1-Feb 2020 13.0 1-Feb 2021 143,105 891,838 (191,228) 557,505 303,247 (1,092) (30,215) (45,323) 226,616 1,618,942 13.5 1-Aug 2020 13.5 1-Aug 2021 143,105 891,838 (191,228) 557,505 303,247 (1,092) (30,215) (45,323) 226,616 1,705,756 14.0 1-Feb 2021 14.0 1-Feb 2022 143,105 900,756 (193,505) 564,146 306,859 (1,105) (30,575) (45,863) 229,316 1,790,839 14.5 1-Aug 2021 14.5 1-Aug 2022 143,105 900,756 (193,505) 564,146 306,859 (1,105) (30,575) (45,863) 229,316 1,873,243 15.0 1-Feb 2022 15.0 1-Feb 2023 143,105 909,764 (195,805) 570,854 310,507 (1,118) (30,939) (46,408) 232,042 1,954,003 15.5 1-Aug 2022 15.5 1-Aug 2023 143,105 909,764 (195,805) 570,854 310,507 (1,118) (30,939) (46,408) 232,042 2,032,221 16.0 1-Feb 2023 16.0 1-Feb 2024 143,105 918,862 (198,128) 577,628 314,192 (1,131) (31,306) (46,959) 234,796 2,108,875 16.5 1-Aug 2023 16.5 1-Aug 2024 143,105 918,862 (198,128) 577,628 314,192 (1,131) (31,306) (46,959) 234,796 2,183,117 17.0 1-Feb 2024 17.0 1-Feb 2025 143,105 928,050 (200,475) 584,471 317,914 (1,144) (31,677) (47,515) 237,577 2,255,874 17.5 1-Aug 2024 17.5 1-Aug 2025 143,105 928,050 (200,475) 584,471 317,914 (1,144) (31,677) (47,515) 237,577 2,326,340 18.0 1-Feb 2025 18.0 1-Feb 2026 143,105 937,331 (202,844) 591,381 321,673 (1,158) (32,051) (48,077) 240,386 2,395,396 18.5 1-Aug 2025 18.5 1-Aug 2026 143,105 937,331 (202,844) 591,381 321,673 (1,158) (32,051) (48,077) 240,386 2,462,277 19.0 1-Feb 2026 19.0 1-Feb 2027 143,105 946,704 (205,238) 598,361 325,470 (1,172) (32,430) (48,645) 243,223 2,527,818 19.5 1-Aug 2026 19.5 1-Aug 2027 143,105 946,704 (205,238) 598,361 325,470 (1,172) (32,430) (48,645) 243,223 2,591,296 20.0 1-Feb 2027 20.0 1-Feb 2028 143,105 956,171 (207,655) 605,411 329,304 (1,185) (32,812) (49,218) 246,089 2,653,500 20.5 1-Aug 2027 20.5 1-Aug 2028 143,105 956,171 (207,655) 605,411 329,304 (1,185) (32,812) (49,218) 246,089 2,713,746 21.0 1-Feb 2028 21.0 1-Feb 2029 143,105 965,733 (210,097) 612,531 333,177 (1,199) (33,198) (49,797) 248,983 2,772,783 21.5 1-Aug 2028 21.5 1-Aug 2029 143,105 965,733 (210,097) 612,531 333,177 (1,199) (33,198) (49,797) 248,983 2,829,960 22.0 1-Feb 2029 22.0 1-Feb 2030 143,105 975,390 (212,563) 619,722 337,089 (1,214) (33,588) (50,381) 251,906 2,885,988 22.5 1-Aug 2029 22.5 1-Aug 2030 143,105 975,390 (212,563) 619,722 337,089 (1,214) (33,588) (50,381) 251,906 2,940,253 23.0 1-Feb 2030 23.0 1-Feb 2031 143,105 985,144 (215,054) 626,986 341,039 (1,228) (33,981) (50,972) 254,859 2,993,425 23.5 1-Aug 2030 23.5 1-Aug 2031 143,105 985,144 (215,054) 626,986 341,039 (1,228) (33,981) (50,972) 254,859 3,044,924 24.0 1-Feb 2031 24.0 1-Feb 2032 143,105 994,995 (217,569) 634,321 345,030 (1,242) (34,379) (51,568) 257,841 3,095,385 24.5 1-Aug 2031 24.5 1-Aug 2032 143,105 994,995 (217,569) 634,321 345,030 (1,242) (34,379) (51,568) 257,841 3,144,258 25.0 1-Feb 2032 25.0 1-Feb 2033 143,105 1,004,945 (220,110) 641,731 349,060 (1,257) (34,780) (52,170) 260,852 3,192,146 25.5 1-Aug 2032 25.5 1-Aug 2033 143,105 1,004,945 (220,110) 641,731 349,060 (1,257) (34,780) (52,170) 260,852 3,238,526 26.0 1-Feb 2033 Totals (7,893,938) 12,556,951 (45,066) (1,247,314) (1,870,971) 9,354,853 Present Value 6,388,790 (23,000) (861,709) (954,869) 3,238,526 NOTES: 1. State Auditor payment is based upon 1st half, pay 2006 actual and may increase over term of district 2. TIF run does not reflect potential reduction in Market Value Homestead Credit 3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value. 4. Inflation on tax rates cannot be captured. 5. TIF does not capture state wide property taxes or market value property taxes Prepared by Ehlers TIF PLAN Run- 09-18-2006 APPENDIX E MINNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT) APPENDIX E-1 APPENDIX F FINDINGS AND BUT/FOR QUALIFICATIONS But-For Analysis Current Market Value 41,513,600 New Market Value - Estimate 310,000,000 Difference 268,486,400 Present Value of Tax Increment 45,943,843 Difference 222,542,557 Value Likely to Occur Without TIF is Less Than: 222,542,557 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for the Cedar Avenue Tax Increment Financing District (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the Cedar Avenue Tax Increment Financing District is a redevelopment district as defined in the Laws of Minnesota 2005, Chapter 152, Article 2, Section 25. Sec. 25. [CITY OF RICHFIELD; TAX INCREMENT FINANCING DISTRICT.] Subdivision 1. [AUTHORIZATION.] The City of Richfield may create a tax increment financing district consisting of an area lying west of Trunk Highway 77 extending: to 16th Avenue between Crosstown Highway 62 and 66th Street; to 17th Avenue between 66th and 69th Streets; and to 18th Avenue between 69th and 72nd Streets. The City or its Housing and Redevelopment Authority may be the authority for the purposes of Minnesota Statutes, sections 469.174 to 469.179. Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.] The redevelopment tax increment district created pursuant to subdivision 1 is deemed to be a redevelopment district and is subject to Minnesota Statutes, sections 469.174 to 469.179, except that: (1) expenditures for activities as defined in Minnesota Statutes, section 469.1763, subdivision 1, paragraph (b), anywhere in the district are deemed to be the costs of correcting conditions that allow the designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10; and (2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not apply. [EFFECTIVE DATE.] This section received local approval by the City of Richfield on June 28, 2005 in APPENDIX F-1 compliance with Minnesota Statutes, section 645.021. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels because of their location in a noise impacted area, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan: This finding is justified on the grounds that the cost of site improvements and utilities add to the total redevelopment cost. Historically, due to the extra cost of sound mitigation and site improvements costs in this area have made redevelopment infeasible without tax increment assistance. This is also the basis for the Special TIF Statute by the State for this TIF District. Therefore, the City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the District, the total increase in market value would be up to $268,486,400. The present value of tax increments from the District is estimated to be $47,049,903. It is the Council's finding that no development with a market value of greater than $221,436,497 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition and public improvements in the general area of the District. (See Cashflow in Appendix D of the TIF Plan.) 3. Finding that the TIF Plan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment Project Area by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City. APPENDIX F-2 APPENDIX G PRIOR IMPROVEMENTS APPENDIX G-1 APPENDIX H Laws of Minnesota 2005, Chapter 152, Article 2, Section 25 Sec. 25. [CITY OF RICHFIELD; TAX INCREMENT FINANCING DISTRICT.] Subdivision 1. [AUTHORIZATION.] The city of Richfield may create a tax increment financing district consisting of an area lying west of Trunk Highway 77 extending: to 16th Avenue between Crosstown Highway 62 and 66th Street; to 17th Avenue between 66th and 69th Streets; and to 18th Avenue between 69th and 72nd Streets. The city or its housing and redevelopment authority may be the authority for the purposes of Minnesota Statutes, sections 469.174 to 469.179. Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.] The redevelopment tax increment district created pursuant to subdivision 1 is deemed to be a redevelopment district and is subject to Minnesota Statutes, sections 469.174 to 469.179, except that: (1) expenditures for activities as defined in Minnesota Statutes, section 469.1763, subdivision 1, paragraph (b), anywhere in the district are deemed to be the costs of correcting conditions that allow the designation of redevelopment districts pursuant to Minnesota Statutes, section 469.174, subdivision 10; and (2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, does not apply. [EFFECTIVE DATE.] This section is effective upon local approval by the city of Richfield in compliance with Minnesota Statutes, section 645.021. APPENDIX H-1 APPENDIX I 2017 SPECIAL LEGISLATION Minnesota Laws 2017, First Special Session, Chapter 1, Article 6, Section 18 is as follows: Sec. 18. CITY OF RICHFIELD; EXTENSION OF CEDAR AVENUE TIF DISTRICT. Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, or any other law to the contrary, the city of Richfield and the Housing and Redevelopment Authority in and for the city of Richfield may elect to extend the duration limit of the redevelopment tax increment financing district known as the Cedar Avenue Tax Increment Financing District established by Laws 2005, chapter 152, article 2, section 25, by ten years. EFFECTIVE DATE. This section is effective upon compliance by the governing bodies of the city of Richfield, Hennepin County and Independent School District No. 280 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2; and 645.021, subdivisions 2 and 3. APPENDIX I-1 As of November 16, 2017 Draft for Public Hearing Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area and the Tax Increment Financing Plan for the establishment of Tax Increment Financing District No. 2017-1 (The Chamberlain) (a housing district) within the Richfield Redevelopment Project Area Richfield Housing and Redevelopment Authority City of Richfield Hennepin County State of Minnesota Public Hearing: November 28, 2017 Adopted: Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com Table of Contents (for reference purposes only) Section 1 - Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area ................................. 1-1 Foreword ............................................................. 1-1 Section 2 - Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)................ 2-1 Subsection 2-1. Foreword............................................... 2-1 Subsection 2-2. Statutory Authority........................................ 2-1 Subsection 2-3. Statement of Objectives ................................... 2-1 Subsection 2-4. Redevelopment Plan Overview .............................. 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2 Subsection 2-6. Classification of the District................................. 2-2 Subsection 2-7. Duration and First Year of Tax Increment of the District........... 2-3 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ................ 2-4 Subsection 2-9. Sources of Revenue/Bonds to be Issued ...................... 2-5 Subsection 2-10. Uses of Funds ........................................... 2-5 Subsection 2-11. Fiscal Disparities Election.................................. 2-6 Subsection 2-12. Business Subsidies....................................... 2-7 Subsection 2-13. County Road Costs ....................................... 2-8 Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions ................. 2-8 Subsection 2-15. Supporting Documentation ................................ 2-10 Subsection 2-16. Definition of Tax Increment Revenues ....................... 2-10 Subsection 2-17. Modifications to the District................................ 2-10 Subsection 2-18. Administrative Expenses .................................. 2-11 Subsection 2-19. Limitation of Increment ................................... 2-12 Subsection 2-20. Use of Tax Increment .................................... 2-13 Subsection 2-21. Excess Increments ...................................... 2-13 Subsection 2-22. Requirements for Agreements with the Developer .............. 2-14 Subsection 2-23. Assessment Agreements ................................. 2-14 Subsection 2-24. Administration of the District ............................... 2-14 Subsection 2-25. Annual Disclosure Requirements ........................... 2-14 Subsection 2-26. Reasonable Expectations ................................. 2-14 Subsection 2-27. Other Limitations on the Use of Tax Increment . ................ 2-15 Subsection 2-28. Summary.............................................. 2-15 Appendix A Project Description ...................................................... A-1 Appendix B Maps of the Richfield Redevelopment Project Area and the District ................ B-1 Appendix C Description of Property to be Included in the District ............................ C-1 Appendix D Estimated Cash Flow for the District ........................................ D-1 Appendix E Housing Qualifications for the District........................................ E-1 Appendix F Findings for the District................................................... F-1 Section 1 - Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area Foreword The following text represents a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Richfield Redevelopment Project Area. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 2017-1 (The Chamberlain) within the Richfield Redevelopment Project Area. For further information, a review of the Redevelopment Plan for the Richfield Redevelopment Project Area is recommended. It is available from the Community Development Director at the City of Richfield. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Richfield Redevelopment Project Area. Richfield Housing and Redevelopment Authority Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area 1-1 Section 2 - Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain) Subsection 2-1. Foreword The Richfield Housing and Redevelopment Authority (the "HRA"), the City of Richfield (the "City"), staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 2017-1 (The Chamberlain) (the "District"), a housing tax increment financing district, located in the Richfield Redevelopment Project Area. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S."), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to 469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area. Subsection 2-3. Statement of Objectives The District currently consists of 31 parcels of land and adjacent and internal rights-of-way. The District is being created to facilitate the construction of 316 mixed-income apartments in the City, which includes rehabilitating 33 existing apartment units and constructing 283 new apartment units. The development will reserve 20 percent of the units (63 units) to be affordable to households with incomes at or below 50 percent of area median income. Please see Appendix A for further District information. The HRA approved a development agreement with Chamberlain Apartments, LLC on October 16, 2017. After the August 28, 2017 meeting, new changes were required so a new approval was completed on October 16, 2017. Development is anticipated to begin in the first quarter of 2018 and be complete by the end of 2020. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Richfield Redevelopment Project Area. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Richfield Redevelopment Project Area and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired - The HRA or City currently owns 27 parcels of property within the District. The HRA intends to purchase another parcel with the District in 2017. The remaining property located within the District may be acquired by the HRA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-1 legal requirements, the HRA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The HRA or City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The HRA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the HRA or City only in order to accomplish one or more of the following: construction of storm sewer improvements; provide land for needed public streets, utilities and facilities; and to carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The HRA or City may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District The HRA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a housing district pursuant to M.S., Section 469.174, Subd. 11 and M.S., Section 469.1761 as defined below: M.S., Section 469.174, Subd.11: "Housing district" means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts, and that satisfies the requirements of M.S., Section 469.1761. Housing project means a project, or portion of a project, that meets all the qualifications of a housing district under this subdivision, whether or not actually established as a housing district. M.S., Section 469.1761: Subd. 1. Requirement imposed. (a) In order for a tax increment financing district to qualify as a housing district: (1) the income limitations provided in this section must be satisfied; and (2) no more than 20 percent of the square footage of buildings that receive assistance from tax increments may consist of commercial, retail, or other nonresidential uses. (b) The requirements imposed by this section apply to property receiving assistance financed with Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-2 tax increments, including interest reduction, land transfers at less than the authority’s cost of acquisition, utility service or connections, roads, parking facilities, or other subsidies. The provisions of this section do not apply to districts located within a targeted area as defined in Section 462C.02 Subd 9, clause (e). (c) For purposes of the requirements of paragraph (a), the authority may elect to treat an addition to an existing structure as a separate building if: (1) construction of the addition begins more than three years after construction of the existing structure was completed; and (2) for an addition that does not meet the requirements of paragraph (a), clause (2),if it is treated as a separate building, the addition was not contemplated by the tax increment financing plan which includes the existing structure. Subd. 2. Owner occupied housing. For owner occupied residential property, 95 percent of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code. Subd. 3. Rental property. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. The requirements of this subdivision apply for the duration of the tax increment financing district. Subd. 4. Noncompliance; enforcement. Failure to comply with the requirements of this section is subject to M.S., Section 469.1771. In meeting the statutory criteria the HRA and City rely on the following facts and findings: • The District consists of 31 parcels. • The development will consist of 316 units of multi-family rental housing. • 20% of the units will be reserved for occupancy by persons with incomes less than 50% of area median income. Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that qualified under the provisions of M.S., Sections 273.111, 273.112, or 273.114 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration and First Year of Tax Increment of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first year of tax increment of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b., the duration of the District will be 25 years after receipt of the first increment by the HRA or City (a total of 26 years of tax increment). The HRA or City elects to receive the first tax increment in 2020, which is no later than four years following the year of approval of the District. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2045, or when the TIF Plan is satisfied. The HRA or City reserves the right to decertify the District prior to Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-3 the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2017 for taxes payable 2018. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2020) the amount by which the original value 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; 3. Change due to adjustments, negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the HRA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2018, assuming the request for certification is made before June 30, 2018. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Richfield Redevelopment Project Area, upon completion of the projects within the District, will annually approximate tax increment revenues as shown in the table below. The HRA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2020. The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed. Project Estimated Tax Capacity upon Completion (PTC) $1,103,790 Original Estimated Net Tax Capacity (ONTC) $63,988 Estimated Captured Tax Capacity (CTC) $1,039,802 Original Local Tax Rate 1.40604 Pay 2017 Estimated Annual Tax Increment (CTC x Local Tax Rate) $1,462,003 Percent Retained by the HRA 100% Tax capacity includes a 3% inflation factor for the duration of the District. The tax capacity included in thischart is the estimated tax capacity of the District in year 25. The tax capacity of the District in year one isestimated to be $192,913. Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-4 TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. Subsection 2-9. Sources of Revenue/Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The HRA or City reserves the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed, the projects within the District will be financed by a pay-as-you-go note and interfund loan but the HRA reserves the right to issue bonds in any form as authorized under the TIF Act. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $25,586,527 Interest $2,558,653 TOTAL $28,145,180 The HRA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments from the District in a maximum principal amount of $17,920,685. Such bonds may be in the form of pay-as- you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the construction of 316 mixed-income apartment units. The HRA and City have determined that it will be necessary to provide assistance to the project(s) for certain District costs, as described. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the table on the following page. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-5 USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $5,100,000 Site Improvements/Preparation $750,000 Utilities $750,000 Affordable Housing $8,250,000 Other Qualifying Improvements $512,032 Administrative Costs (up to 10%)$2,558,653 PROJECT COST TOTAL $17,920,685 Interest $10,224,495 PROJECT AND INTEREST COSTS TOTAL $28,145,180 The total project cost, including financing costs (interest) listed in the table above does not exceed the total projected tax increments for the District as shown in Subsection 2-9. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. The HRA may expend funds for qualified housing activities outside of the District boundaries. Subsection 2-11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (inside the District) are followed, the following method of computation shall apply: (1) The original net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal disparity commercial-industrial net tax capacity increase between the original year and the current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section 276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditor shall exclude the retained captured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-6 The HRA will choose to calculate fiscal disparities by clause b. It is not anticipated that the District will contain commercial/industrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. According to Section 469.177, Subd. 3 of the TIF Act: (c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2-12. Business Subsidies Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers' compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 © (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $150,000 or less; Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-7 (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100. The HRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2-13. County Road Costs Pursuant to M.S., Section 469.175, Subd. 1a, the county board may require the HRA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the HRA or City within forty- five days of receipt of this TIF Plan. In the opinion of the HRA and City and consultants, the proposed development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The HRA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the HRA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: IMPACT ON TAX BASE Estimated 2017/Pay 2018 Total Net Tax Capacity Estimated Captured Tax Capacity (CTC) Upon Completion Percent of CTC to Entity Total Hennepin County 1,691,017,124 1,039,802 0.0615% City of Richfield 30,179,862 1,039,802 3.4454% Richfield Public ISD No. 280 43,840,919 1,039,802 2.3718% Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-8 IMPACT ON TAX RATES Pay 2017 Extension Rates Percent of Total CTC Potential Taxes Hennepin County 0.440870 31.36% 1,039,802 458,418 City of Richfield 0.584060 41.54% 1,039,802 607,307 Richfield Public ISD No. 280 0.270540 19.24% 1,039,802 281,308 Other 0.110570 7.86%1,039,802 114,971 Total 1.406040 100.00%1,462,003 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2017 rate. The total net capacity for the entities listed above are based on estimated Pay 2018 figures. The District will be certified under the actual Pay 2018 rates and figures, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $25,586,527; (2) Probable impact of the District on city provided services and ability to issue debt. A minimal impact of the District on police protection is expected. The City does track all calls for service including property-type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City believes there is a slight possibility that the proposed development, in and of itself, will necessitate new capital investment in vehicles. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The existing buildings are several non-sprinkled single family homes that are being replaced by three fully sprinkled multi- family homes. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. The development in the District is expected to contribute an estimated $705,740 in sanitary sewer (SAC) and water (WAC) connection fees. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-9 (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is $4,922,848; (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same, is $8,023,935; (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2-15. Supporting Documentation Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the HRA and City's findings: • Cedar Avenue Corridor Master Plan (2016) • City of Richfield Comprehensive Plan (2007) • Cedar Avenue Corridor Redevelopment Concept Master Plan (2004) Subsection 2-16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the authority with tax increments; 3. Principal and interest received on loans or other advances made by the authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993; and 6. The market value homestead credit paid to the Authority under M.S., Section 273.1384. Subsection 2-17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-10 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City; 5. Increase in the estimate of the cost of the District, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the HRA or City, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S. Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 11 must be documented. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The HRA or City must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2-18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the HRA or City, other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District; 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-11 any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined in M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits of M.S., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to M.S., Section 469.177, 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 authority 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 authority 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 authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by approximately November 2021 and report such actions to the County Auditor. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-12 Subsection 2-20. Use of Tax Increment The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. To finance, or otherwise pay public redevelopment costs of the Richfield Redevelopment Project Area pursuant to M.S., Sections 469.001 to 469.047; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the HRA or City or for the benefit of the Richfield Redevelopment Project Area by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178. Revenues derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in M.S., Sections 469.174, Subd. 11 and 469.1761. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the HRA or City may be included in the cost of a housing project. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for HRA or City administration (up to 10 percent) and for the costs of public improvement activities outside the District. Subsection 2-21. Excess Increments Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The HRA or City must spend or return the excess increments under paragraph (c) within nine months after the end of the year. In addition, the HRA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in the Richfield Redevelopment Project Area or the District. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-13 Subsection 2-22. Requirements for Agreements with the Developer The HRA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the development with City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the acreage, the HRA or City concluded an agreement for the development of the property acquired and which provides recourse for the HRA or City should the development not be completed. Subsection 2-23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the 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 County Assessor shall also certify the minimum market value agreement. Subsection 2-24. Administration of the District Administration of the District will be handled by the Community Development Director. Subsection 2-25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the HRA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-14 increments for the maximum duration of the District permitted by the TIF Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness of the feasibility of developing the project site(s) within the District. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-27. Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Richfield Redevelopment Project Area pursuant to M.S., Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Housing District Exceptions to Restriction on Pooling; Five Year Limit. Pursuant to M.S., Section 469.1763, (1) At least 80% of revenues derived from tax increments paid by properties in the District must be expended on Public Costs incurred within said district, and up to 20% of said tax increments may be spent on public costs incurred outside of the District but within the Richfield Redevelopment Project Area; provided that in the case of a housing district, a housing project, as defined in M.S., Section 469.174, Subd. 11, is deemed to be an activity in the District, even if the expenditure occurred after five years. Subsection 2-28. Summary The Richfield Housing and Redevelopment Authority is establishing the District to provide an impetus for residential development and provide safe and decent life cycle housing in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113- 1105, telephone (651) 697-8500. Richfield Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain)2-15 Appendix A Project Description Chamberlain Apartments, LLC intends to redevelop the parcels in the District into a mixed-income housing projects with a total of 316 apartment units that includes rehabilitating three existing buildings with a total of 33 apartment units and constructing three new buildings with a total of 283 apartment units. The new apartments will include underground parking. The development will reserve 20% of the units (63 units) to be affordable to households at or below 50% of area median income. The Developer will construct a new public road through the site. Construction is anticipated to start in the first quarter of 2018 and be completed by the end of 2020. Appendix A-1 Appendix B Maps of the Richfield Redevelopment Project Area and the District Appendix B-1 ]72.17[ ]94.96[]30.54[[82.16][33.89]]51.06[[25.31][53.64] ]26.75[[53.64][36.47]] 92.08[ [36.43] ]7 8.64[ ]82.211[ [74] [134.34] [388.25]]6.16[=C[38.6]C=[49.8] ]94.96[]30.54[[82.16][33.89]]51.06[[25.31]71st 1/2 70th 1/2 LOGAN75th VINCENTUPTONTHOMASWASHBURNXERXESI - 494 78th 77th 76th OLIVERNEWTONMORGANSHERIDANRUSSELLQUEENPENN74th 72nd 73th 71st 69th 70th DUPONTKNOXJAMESIRVINGHUMBOLDTGIRARDFREMONTEMERSONCOLFAXBRYANTALDRICHGARFIELDGRANDHARRIETLYNDALECR OSSTOWN H WY 62nd 67th 68th 66th 65th 64th 63rd SHERIDANWASHBURNXERXESVINCENTUPTONTHOMASRUSSELLQUEENPENNOLIVERNEWTONMORGANLOGANDUPONTHUMBOLDTKNOXJAMESIRVINGGIRARDEMERSONFREMONTLYNDALECOLFAXBRYANTALDRICHGARFIELDHARRIETGRAND69th 71st 72nd 73th 74th 75th 78th 70th 76th 77th COLUMBUS2nd1stSTEVENSPLEASANTPILLSBURYBLAISDELLWENTWORTHNICOLLET3rdCLINTON4th5thPORTLANDOAKLANDPARK10th11th12th13th14thELLIOTCHICAGO15th16th17th18thCEDARBLOOMINGTONI-494 62nd 63rd 64th 65th 67th 68th 66thCOLUMBUSPLEASANTPILLSBURYWENTWORTHBLAISDELLSTEVENSNICOLLET1st2nd5thCLINTON3rd4thOAKLANDPARKPORTLAND15th11thCHICAGOELLIOT10th13th12th14thBLOOMINGTON16th17thCEDAR18th 19008009001000110012001300180060050040030020050100124200300324400500620700720800900100011001300140015001600170018001001524190060012000007001400290028002700260025002200210020003000150016001700240031002300´11-2017 CEDAR CORRIDOR AND 2017-1 HOUSING TIF DISTRICTS 0 0.5 10.25 MilesRichfield Redevelopment Project area boundary2017-1 Housing TIF District Boundary Cedar Corridor TIF District Boundary Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed below. Parcel Numbers Address Owner 26-028-24-41-0067 6620 18 th Ave S HRA 26-028-24-41-0068 6626 18 th Ave S HRA 26-028-24-41-0069 6632 18 th Ave S HRA 26-028-24-41-0070 6638 18 th Ave S HRA 26-028-24-41-0071 6644 18 th Ave S HRA 26-028-24-41-0072 6645 17 th Ave S HRA 26-028-24-41-0073 6639 17 th Ave S HRA 26-028-24-41-0074 6633 17 th Ave S HRA 26-028-24-41-0075 6627 17 th Ave S HRA 26-028-24-41-0076 6621 17 th Ave S HRA 26-028-24-41-0077 6615 17 th Ave S HRA 26-028-24-41-0080 6700 18 th Ave S HRA 26-028-24-41-0081 6708 18 th Ave S HRA 26-028-24-41-0082 6714 18 th Ave S HRA 26-028-24-41-0083 6720 18 th Ave S HRA 26-028-24-41-0084 6726 18 th Ave S HRA 26-028-24-41-0085 6732 18 th Ave S HRA 26-028-24-41-0086 6738 18 th Ave S HRA 26-028-24-41-0087 6744 18 th Ave S HRA 26-028-24-41-0096 6700 Cedar Ave S HRA 26-028-24-41-0097 6720 Cedar Ave S Cedar South Pointe LLC 26-028-24-41-0098 6730 Cedar Ave S Cedar South Pointe LLC 26-028-24-41-0099 6744 Cedar Ave S Cedar South Pointe LLC 26-028-24-41-0100 6745 18 th Ave S HRA 26-028-24-41-0101 6739 18 th Ave S HRA Appendix C-1 26-028-24-41-0102 6733 18 th Ave S HRA 26-028-24-41-0103 6727 18 th Ave S HRA 26-028-24-41-0104 6721 18 th Ave S HRA 26-028-24-41-0105** 6715 18 th Ave S Richfield Apartments LLC 26-028-24-41-0106 6709 18 th Ave S HRA 26-028-24-41-0107 6701 18 th Ave S HRA *All of the listed parcels are currently in the Cedar Avenue Tax Increment Financing District and will be removed for inclusion in the District. ** The HRA plans to purchase 6715 18th Ave South in 2017. Appendix C-2 Appendix D Estimated Cash Flow for the District Appendix D-1 11/13/2017Base Value Assumptions - Page 1The Chamberlain Apts (2017-1 Housing)City of Richfield316 Mixed Income AptsASSUMPTIONS AND RATESDistrictType: HousingDistrict Name/Number:County District #:Exempt Class Rate (Exempt) 0.00%First Year Construction or Inflation on Value 2018Commercial Industrial Preferred Class Rate (C/I Pref.)Existing District - Specify No. Years RemainingFirst $150,000 1.50%Inflation Rate - Every Year:3.00%Over $150,000 2.00%Interest Rate:4.00%Commercial Industrial Class Rate (C/I) 2.00%Present Value Date:1-Aug-19Rental Housing Class Rate (Rental) 1.25%First Period Ending 1-Feb-20Affordable Rental Housing Class Rate (Aff. Rental)Tax Year District was Certified:Pay 2018First $115,000 0.75%Cashflow Assumes First Tax Increment For Development: 2020 Over $115,000 0.25%Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit)Assumes Last Year of Tax Increment 2045 First $500,000 1.00%Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,000 1.25%Incremental or Total Fiscal DisparitiesIncrementalHomestead Residential Class Rate (Hmstd. Res.)Fiscal Disparities Contribution Ratio 34.3809% Pay 2017 First $500,000 1.00%Fiscal Disparities Metro-Wide Tax Rate 150.0490% Pay 2017 Over $500,000 1.25%Maximum/Frozen Local Tax Rate: 140.604% Pay 2017 Agricultural Non-Homestead 1.00%Current Local Tax Rate: (Use lesser of Current or Max.) 140.604%Pay 2017 State-wide Tax Rate (Comm./Ind. only used for total taxes) 45.8020% Pay 2017 Market Value Tax Rate (Used for total taxes) 0.12679% Pay 2017 Building Total Percentage Tax Year Property Current Class AfterLand Market Market Of Value Used Original Original Tax Original After ConversionMap # PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap.26-028-24-41-0067RA City of Richfie6620 18th Ave. S. 2,547,000 2,547,000 100% 2,547,000 Pay 2018 Exempt - Rental 31,838 A26-028-24-41-0068RA City of Richfie6626 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0069RA City of Richfie6632 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0070RA City of Richfie6638 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0071RA City of Richfie6644 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0072RA City of Richfie6645 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0073RA City of Richfie6639 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0074RA City of Richfie6633 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0075RA City of Richfie6627 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0076RA City of Richfie6621 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0077RA City of Richfie6615 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - A26-028-24-41-0080RA City of Richfie6700 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0081RA City of Richfie6708 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0082RA City of Richfie6714 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0083RA City of Richfie6720 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0084RA City of Richfie6726 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0085RA City of Richfie6732 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0086RA City of Richfie6738 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0087RA City of Richfie6744 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - B26-028-24-41-0100RA City of Richfie6745 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - C26-028-24-41-0101RA City of Richfie6739 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - C26-028-24-41-0102RA City of Richfie6733 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - C26-028-24-41-0103RA City of Richfie6727 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - C26-028-24-41-0104RA City of Richfie6721 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - C26-028-24-41-0105field Apartments 6715 18th Ave. S. 76,000 105,000 181,000 100% 181,000Pay 2018 Hmstd. Res. 1,810 Rental 2,263 C26-028-24-41-0106RA City of Richfie6709 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - C26-028-24-41-0107RA City of Richfie6701 18th Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - C26-028-24-41-0096RA City of Richfie6700 Cedar Ave. S. 0 100% 0 Pay 2018 Exempt - Rental - D26-028-24-41-0097 ar South Pointe 6720 Cedar Ave. S 132,000 665,000 797,000 100% 797,000 Pay 2018 Rental 9,963 Rental 9,963 D26-028-24-41-0098 ar South Pointe 6730 Cedar Ave. S 132,000 665,000 797,000 100% 797,000 Pay 2018 Rental 9,963 Rental 9,963 D26-028-24-41-0099 ar South Pointe 6744 Cedar Ave. S 132,000 665,000 797,000 100% 797,000 Pay 2018 Rental 9,963 Rental 9,963 D3,019,000 2,100,000 5,119,0005,119,000 31,698 63,988Note:1. HRA-owned property assumes a value of $9,000 per new unit for 283 units based on discussions with County Assessor on 8-23-17. The $2,547,000 value represents the base value for all HRA owned property. The Hennepin County Assessor will allocate the value to the HRA owned parcels as necessary. Remaining base values per County website on 8-21-17.Area/ PhaseTax Rates BASE VALUE INFORMATION (Original Tax Capacity)Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2017-1 Housing TIF\TIF Plan Run 10-18-17 11/13/2017Base Value Assumptions - Page 2The Chamberlain Apts (2017-1 Housing)City of Richfield316 Mixed Income AptsEstimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First YearMarket Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full TaxesArea/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./UnitsValue Class Tax Capacity Capacity/Unit 2018 2019 2020 2021 PayableAApartments 143,000 143,000 93 13,299,000 Rental 166,238 1,788 60% 100% 100% 100% 2021BApartments 143,000 143,000 95 13,585,000 Rental 169,813 1,788 40% 100% 100% 100% 2021CApartments 143,000 143,000 95 13,585,000 Rental 169,813 1,788 0% 60% 100% 100% 2022DApartments 102,000 102,000 33 3,366,000 Rental 42,075 1,275 60% 100% 100% 100% 2021TOTAL43,835,000 547,938 Subtotal Residential 316 43,835,000 547,938 Subtotal Commercial/Ind. 0 0 0 Note:1. Est. Market Value per County Assessor on 8-23-17.Total Fiscal Local Local Fiscal State-wide MarketTax Disparities Tax Property Disparities PropertyValue Total Taxes PerNew UseCapacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq. Ft./UnitApartments 166,238 0 166,238 233,737 0 0 16,862 250,598 2,694.61Apartments 169,813 0 169,813 238,763 0 0 17,224 255,988 2,694.61Apartments 169,813 0 169,813 238,763 0 0 17,224 255,988 2,694.61Apartments 42,075 0 42,075 59,159 0 0 4,268 63,427 1,922.03TOTAL 547,938 0 547,938 770,422 0 0 55,578 826,000Note: 1. Taxes and tax increment will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors which cannot be predicted.Total Property Taxes 826,000less State-wide Taxes 0less Fiscal Disp. Adj. 0less Market Value Taxes (55,578)less Base Value Taxes (89,969)Annual Gross TIF 680,453 WHAT IS EXCLUDED FROM TIF?TAX CALCULATIONSPROJECT INFORMATION (Project Tax Capacity)Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2017-1 Housing TIF\TIF Plan Run 10-18-17 11/13/2017Tax Increment Cashflow - Page 3The Chamberlain Apts (2017-1 Housing)City of Richfield316 Mixed Income AptsTAX INCREMENT CASH FLOWProject Original Fiscal Captured Local Annual Semi-Annual State Admin.Semi-Annual Semi-Annual PERIOD% of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax PaymentOTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36% 10% Increment Value Yrs. Year Date- - - - 02/01/20100% 192,913 (63,988) - 128,925 140.604% 181,274 90,637 (326) (9,031) 81,280 78,123 0.52020 08/01/20100% 192,913 (63,988) - 128,925 140.604% 181,274 90,637 (326) (9,031) 81,280 154,715 12020 02/01/21100% 480,013 (63,988) - 416,025 140.604% 584,948 292,474 (1,053) (29,142) 262,279 397,020 1.52021 08/01/21100% 480,013 (63,988) - 416,025 140.604% 584,948 292,474 (1,053) (29,142) 262,279 634,574 22021 02/01/22100% 559,281 (63,988) - 495,294 140.604% 696,403 348,201 (1,254) (34,695) 312,253 911,846 2.52022 08/01/22100% 559,281 (63,988) - 495,294 140.604% 696,403 348,201 (1,254) (34,695) 312,253 1,183,681 32022 02/01/23100% 576,060 (63,988) - 512,072 140.604% 719,994 359,997 (1,296) (35,870) 322,831 1,459,214 3.52023 08/01/23100% 576,060 (63,988) - 512,072 140.604% 719,994 359,997 (1,296) (35,870) 322,831 1,729,344 42023 02/01/24100% 593,341 (63,988) - 529,354 140.604% 744,293 372,146 (1,340) (37,081) 333,726 2,003,116 4.52024 08/01/24100% 593,341 (63,988) - 529,354 140.604% 744,293 372,146 (1,340) (37,081) 333,726 2,271,520 52024 02/01/25100% 611,142 (63,988) - 547,154 140.604% 769,321 384,660 (1,385) (38,328) 344,948 2,543,509 5.52025 08/01/25100% 611,142 (63,988) - 547,154 140.604% 769,321 384,660 (1,385) (38,328) 344,948 2,810,165 62025 02/01/26100% 629,476 (63,988) - 565,488 140.604% 795,099 397,550 (1,431) (39,612) 356,507 3,080,352 6.52026 08/01/26100% 629,476 (63,988) - 565,488 140.604% 795,099 397,550 (1,431) (39,612) 356,507 3,345,242 72026 02/01/27100% 648,360 (63,988) - 584,373 140.604% 821,651 410,826 (1,479) (40,935) 368,412 3,613,610 7.52027 08/01/27100% 648,360 (63,988) - 584,373 140.604% 821,651 410,826 (1,479) (40,935) 368,412 3,876,716 82027 02/01/28100% 667,811 (63,988) - 603,824 140.604% 849,000 424,500 (1,528) (42,297) 380,675 4,143,249 8.52028 08/01/28100% 667,811 (63,988) - 603,824 140.604% 849,000 424,500 (1,528) (42,297) 380,675 4,404,556 92028 02/01/29100% 687,845 (63,988) - 623,858 140.604% 877,169 438,585 (1,579) (43,701) 393,305 4,669,239 9.52029 08/01/29100% 687,845 (63,988) - 623,858 140.604% 877,169 438,585 (1,579) (43,701) 393,305 4,928,732 102029 02/01/30100% 708,481 (63,988) - 644,493 140.604% 906,183 453,092 (1,631) (45,146) 406,314 5,191,552 10.52030 08/01/30100% 708,481 (63,988) - 644,493 140.604% 906,183 453,092 (1,631) (45,146) 406,314 5,449,219 112030 02/01/31100% 729,735 (63,988) - 665,748 140.604% 936,068 468,034 (1,685) (46,635) 419,714 5,710,164 11.52031 08/01/31100% 729,735 (63,988) - 665,748 140.604% 936,068 468,034 (1,685) (46,635) 419,714 5,965,993 122031 02/01/32100% 751,627 (63,988) - 687,640 140.604% 966,849 483,424 (1,740) (48,168) 433,516 6,225,053 12.52032 08/01/32100% 751,627 (63,988) - 687,640 140.604% 966,849 483,424 (1,740) (48,168) 433,516 6,479,034 132032 02/01/33100% 774,176 (63,988) - 710,189 140.604% 998,554 499,277 (1,797) (49,748) 447,731 6,736,199 13.52033 08/01/33100% 774,176 (63,988) - 710,189 140.604% 998,554 499,277 (1,797) (49,748) 447,731 6,988,322 142033 02/01/34100% 797,401 (63,988) - 733,414 140.604% 1,031,209 515,605 (1,856) (51,375) 462,374 7,243,585 14.52034 08/01/34100% 797,401 (63,988) - 733,414 140.604% 1,031,209 515,605 (1,856) (51,375) 462,374 7,493,843 152034 02/01/35100% 821,323 (63,988) - 757,336 140.604% 1,064,845 532,422 (1,917) (53,051) 477,455 7,747,197 15.52035 08/01/35100% 821,323 (63,988) - 757,336 140.604% 1,064,845 532,422 (1,917) (53,051) 477,455 7,995,582 162035 02/01/36100% 845,963 (63,988) - 781,976 140.604% 1,099,489 549,744 (1,979) (54,777) 492,989 8,247,021 16.52036 08/01/36100% 845,963 (63,988) - 781,976 140.604% 1,099,489 549,744 (1,979) (54,777) 492,989 8,493,529 172036 02/01/37100% 871,342 (63,988) - 807,354 140.604% 1,135,173 567,586 (2,043) (56,554) 508,989 8,743,047 17.52037 08/01/37100% 871,342 (63,988) - 807,354 140.604% 1,135,173 567,586 (2,043) (56,554) 508,989 8,987,672 182037 02/01/38100% 897,482 (63,988) - 833,495 140.604% 1,171,927 585,963 (2,109) (58,385) 525,469 9,235,266 18.52038 08/01/38100% 897,482 (63,988) - 833,495 140.604% 1,171,927 585,963 (2,109) (58,385) 525,469 9,478,006 192038 02/01/39100% 924,407 (63,988) - 860,419 140.604% 1,209,784 604,892 (2,178) (60,271) 542,443 9,723,673 19.52039 08/01/39100% 924,407 (63,988) - 860,419 140.604% 1,209,784 604,892 (2,178) (60,271) 542,443 9,964,523 202039 02/01/40100% 952,139 (63,988) - 888,151 140.604% 1,248,776 624,388 (2,248) (62,214) 559,926 10,208,261 20.52040 08/01/40100% 952,139 (63,988) - 888,151 140.604% 1,248,776 624,388 (2,248) (62,214) 559,926 10,447,220 212040 02/01/41100% 980,703 (63,988) - 916,716 140.604% 1,288,939 644,469 (2,320) (64,215) 577,934 10,689,028 21.52041 08/01/41100% 980,703 (63,988) - 916,716 140.604% 1,288,939 644,469 (2,320) (64,215) 577,934 10,926,095 222041 02/01/42100% 1,010,124 (63,988) - 946,137 140.604% 1,330,306 665,153 (2,395) (66,276) 596,483 11,165,973 22.52042 08/01/42100% 1,010,124 (63,988) - 946,137 140.604% 1,330,306 665,153 (2,395) (66,276) 596,483 11,401,147 232042 02/01/43100% 1,040,428 (63,988) - 976,440 140.604% 1,372,914 686,457 (2,471) (68,399) 615,587 11,639,095 23.52043 08/01/43100% 1,040,428 (63,988) - 976,440 140.604% 1,372,914 686,457 (2,471) (68,399) 615,587 11,872,377 242043 02/01/44100% 1,071,641 (63,988) - 1,007,653 140.604% 1,416,801 708,400 (2,550) (70,585) 635,265 12,108,395 24.52044 08/01/44100% 1,071,641 (63,988) - 1,007,653 140.604% 1,416,801 708,400 (2,550) (70,585) 635,265 12,339,786 252044 02/01/45100% 1,103,790 (63,988) - 1,039,802 140.604% 1,462,004 731,002 (2,632) (72,837) 655,533 12,573,878 25.52045 08/01/45100% 1,103,790 (63,988) - 1,039,802 140.604% 1,462,004 731,002 (2,632) (72,837) 655,533 12,803,379 262045 02/01/46 Total25,678,972 (92,444) (2,558,653) 23,027,875 Present Value From 08/01/2019 Present Value Rate 4.00% 14,277,376 (51,399) (1,422,598) 12,803,379 Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\Richfield\Housing-ED-Redevelopment\TIF\TIF Districts\2017-1 Housing TIF\TIF Plan Run 10-18-17 Appendix E Housing Qualifications for the District INCOME RESTRICTIONS - ADJUSTED FOR FAMILY SIZE (HOUSING DISTRICT) - HENNEPIN COUNTY HENNEPIN COUNTY MEDIAN INCOME: $90,400 No. of Persons 50% of Median Income 60% of Median Income 1-person $31,650 $37,980 2-person $36,200 $43,440 3-person $40,700 $48,840 4-person $45,200 $54,240 Source: Department of Housing and Urban Development and Minnesota Housing Finance Agency The two options for income limits on a standard housing district are 20% of the units at 50% of median income or 40% of the units at 60% of median income. There are no rent restrictions for a housing district. ***PLEASE NOTE: THESE NUMBERS ARE ADJUSTED ANNUALLY. ALL INCOME FIGURES REPORTED ON THIS PAGE ARE FOR 2017. Appendix E-1 Appendix F Findings for the District The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Tax Increment Financing District No. 2017-1 (The Chamberlain) is a housing district as defined in M.S., Section 469.174, Subd. 11. TIF District No. 2017-1 (The Chamberlain) consists of 31 parcels. As proposed, the development will consist of mixed-income housing projects with a total of 316 apartment units that includes rehabilitating three existing buildings with a total of 33 apartment units and constructing three new buildings with a total of 283 apartment units. All or a portion of which will receive tax increment assistance and will meet income restrictions described in M.S. 469.1761. At least 20 percent of the units/homes receiving assistance will have incomes at or below 50 percent of area median income. Appendices A and E of the TIF Plan contains background for the above finding. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the development proposed in this plan is a housing district that meets the City's objectives for development and redevelopment, but that due to the high costs of building new housing in the City, the cost of financing the proposed public improvements, and the insufficiency of rents in developments with affordable housing to provide a sufficient financial return, the project is feasible only through the assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a pro forma as justification that the developer would not have gone forward without tax increment assistance. 3. Finding that the TIF Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain) conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for Tax Increment Financing District No. 2017-1 (The Chamberlain) will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Richfield Redevelopment Project Area by private enterprise. Through the implementation of the TIF Plan, the HRA or City will provide an impetus for residential development, which is desirable or necessary for increased population and an increased need for life- cycle housing within the City. Appendix F-1 AGENDA SECTION:PUBLIC HEARINGS AGENDA ITEM #5. STAFF RE P ORT NO. 50 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: Melissa P oehlman, A sst. C ommunity D evelopment D irector D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 11/14/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Public hearing and consideration of the appr oval of a resolution approving the conveyance of proper ty located along 18th Avenue between 66th and 68th Streets to Chamberlain Apartments L L C. E X E C UT IV E S UM M ARY: On September 26, 2017, the Council approved plans for The C hamberlain, a multi-family housing development on the city 's east side that also inc ludes a two-block extension of Ric hfield Parkway. A revised Contract for P rivate Development (Agreement) with Chamberlain Apartments LLC (Developer) was approved by the HRA on Oc tober 16, 2017. The Agreement calls for the sale of land currently owned by the HRA to the Developer for $1,711,445. The D eveloper will pay $300,000 at closing and the remainder will be paid over time with interest (2.0%) beginning on August 1, 2025 and c ontinuing until the purc hase pric e has been paid in full. RE C O M M E ND E D AC T IO N: Conduct and close a public hearing and by motion: Approve a resolution approving the conveyance of certain real property to Chamberlain Apartments LL C . B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT To address the impac ts of low-frequency noise c reated by the proximity of a new airport runway, the C ity began purchasing homes in this area in 2002. Funds provided by the Metropolitan Airports C ommission (MA C) were used to acquire and demolish structures that were deemed inc ompatible with the vibration that planes would create. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): I n 2016, the c ity adopted an updated Cedar C orridor Master Plan which includes the following goals: To establish a renewed brand at a signature gateway to the city ; To inc rease the diversity of housing options; and To encourage the rehabilitation and replacement of the lowest-quality housing stock. The approved projec t is consistent with these goals. I n ac cordanc e with Minnesota Statutes, Section 469.029, Subdivision 2, the HRA is required to hold a duly noticed public hearing on the c onveyanc e of property to the D eveloper. C.C R IT IC AL T IMIN G ISSU E S: A closing has not yet been scheduled, but must take plac e before A pril 1, 2018, unless extended by mutual agreement of the HRA and the D eveloper. Construction must begin by August 1, 2018. D.F IN AN C IAL IMPAC T: The D eveloper will pay the HRA $300,000 for the property at clsoing and the remainder of the property's appraised value ($1,411,445) plus interest will be paid under a Developer Cash Surplus Note over time beginning in 2025. This note has been guaranteed by K raus-Anderson, I nc orporated. I n the event that pay ments cannot be made from Surplus Cash, Kraus-Anderson, I nc orporated will make the required pay ments. MA C staff and legal counsel have taken the position that the terms of the agreement between the MA C and the C ity, sale proceeds from the resale of the land must be either used for further mitigation ac tivities in areas where noise exc eeds 65 dec ibels or be repaid to MA C . City /HRA staff and legal counsel have been in disc ussions with the MA C to c larify this position and determine whether there are any other uses of the sale proceeds that might meet the requirements of that agreement. E.L E GAL C ON S ID E R AT ION : The HRA Attorney drafted the Contrac t for Private Development approved on October 16, 2017 and this resolution. ALT E R N AT IV E R E C O MME N D AT IO N(S): Reject the resolution. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: Representatives of I nland Development Partners AT TAC H ME N TS : D escripti on Type Resolution Resolution L etter Map E xhibit 510829v1 JAE RC125-348 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION APPROVING CONVEYANCE OF CERTAIN REAL PROPERTY TO CHAMERLAIN APARTMENTS, LLC WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) owns certain real property legally described in EXHIBIT A attached hereto (the “Property”) in the City of Richfield, Minnesota (the “City”); and WHEREAS, the Authority and the Chamberlain Apartments, LLC, a Delaware limited liability company (the “Developer”) have entered into a Contract for Private Development (the “Agreement”), dated October 24, 2017, pursuant to which the Developer will acquire the Property from the Authority and construct a multifamily housing development with approximately 283 apartment units, substantially rehabilitate three 11-unit apartment buildings, and construct underground parking (the “Minimum Improvements”), and the Authority will reimburse the Developer for a portion of land acquisition costs and certain site improvements costs related thereto with tax increment generated by the Minimum Improvements; and WHEREAS, in order to promote the redevelopment of land in the City, the Authority is considering conveying the Property to the Developer for the proposed redevelopment thereof; and WHEREAS, the Agreement provides that the Authority will convey the Property to the Developer only after the Board of the Authority holds a public hearing and provides its consent to the conveyance; and WHEREAS, on the date hereof, the Board of Commissioners of the Authority (the “Board”) conducted a duly noticed public hearing on the conveyance of the Property to the Developer, in accordance with Minnesota Statutes, Section 469.029, subdivision 2; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The conveyance of the Property to the Developer as contemplated by the Agreement is in all respects authorized, approved, and confirmed. 2. The Chairperson and the Executive Director are hereby authorized to execute and deliver to the Developer a quit claim deed and any and all other documents or certificates deemed necessary to carry out the intentions of this resolution and the Purchase Agreement. 2 510829v1 JAE RC125-348 Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of November, 2017. Mary Supple, Chair ATTEST: _______________________, Secretary A-1 510829v1 JAE RC125-348 EXHIBIT A LEGAL DESCRIPTION OF THE AUTHORITY PROPERTY Lots 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14, Block 2, Wexler’s Addition, Hennepin County, Minnesota Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 3, Wexler’s Addition, Hennepin County, Minnesota Lots 1, 2, 9, 10, 11, 12, 13, 14, 15, and 16, Block 4, Wexler’s Addition, Hennepin County, Minnesota Phone(952)937-51507699AnagramDriveFax(952)937-5822EdenPrairie,MN55344TollFree(888)937-5150 AGENDA SECTION:OTHER BUSINESS AGENDA ITEM #6. STAFF RE P ORT NO. 51 HOUSING AND REDE V E LOP MENT AUT HORIT Y ME E T ING 11/20/2017 RE P O RT P RE PA RE D B Y: Melissa P oehlman, A sst. C ommunity D evelopment D irector D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 11/14/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, E xecutive D irector 11/15/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a petition r equesting that the City Council consider the vacation of portions of 67th Street within the boundar ies of the new Chamberlain development. E X E C UT IV E S UM M ARY: Tonight, the HRA will consider the sale of a number of properties and adjacent 67th Street right-of-way to the Chamberlain A partments LLC. I n order to allow for the construction of The C hamberlain projec t as approved, this sale includes a portion of what is now 67th S treet right-of-way. There are two distinct sec tions of 67th Street that are proposed for vacation: We st of 18th Ave nue: T he roadway in this area of 67th Street was largely removed a number of years ago; however, legally the right-of-way remains. T his right-of-way is no longer necessary and should be vacated. (Note - the vacation does not include right-of-way adjacent to and providing access to the property at 6701 - 17th Avenue.) East of 18th Av enue : 67th Street provides a curved connection from 18th Avenue/Richfield Parkway to Cedar Avenue. T his connection will be reoriented and reconstructed as part of the project. T he existing right-of-way should be vacated and new right-of-way dedicated as part of the platting process. As the owner of more than 50 percent of the land abutting this right-of-way, the HRA is asked to petition the Council to vacate the road. RE C O M M E ND E D AC T IO N: By motion: Approve submittal of a petition requesting the vacation of the por tions of 67th Avenue adjacent to the following properties: 6644, 6700, 6701, and 6709 18th Avenue and 6700 C edar Avenue. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT The portion of 67th Street west of 18th Avenue was largely removed in 2007; however, legally remains in place. Construction of the new C hamberlain development will eliminate the need for this portion of the road in the future. No formal easements for the portion of 67th Street that connects 18th Avenue/Richfield Parkway to Cedar Avenue exist; however, bec ause the road has been in plac e for a number of years, an offic ial vac ation is required. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): The C ounc il may vacate a street, alley, public grounds, or a part thereof, on its own motion or upon the petition of the owners of half of the land abutting the street, alley, public grounds, or part thereof to be vac ated. No vacation may be made unless it appears in the interest of the public to do so. C.C R IT IC AL T IMIN G ISSU E S: Public hearings for the proposed vac ations are sc heduled for November 28th and D ec ember 12th. D.F IN AN C IAL IMPAC T: The right-of-way in question was included in the appraisal of the property and the agreed upon purchase price. E.L E GAL C ON S ID E R AT ION : None ALT E R N AT IV E R E C O MME N D AT IO N(S): Deny submittal of the petition requesting vacation of 67th Street right-of-way. The C ity Council may proceed with consideration by its own motion. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: None AT TAC H ME N TS : D escripti on Type P etition for S i gnature E xhibit 67th S treet (West of 18th) to be vacated E xhibit 67th S treet (E ast of 18th) to be vacated E xhibit S ite P lan wi th approximate vacation locations E xhibit PETITION FOR VACATION OF STREETS, ALLEYS, AND PUBLIC GROUNDS To: Richfield City Council We, the undersigned owners of land abutting _6644 18th Avenue, 6700 18th Avenue, 6701 18th Avenue, 6709 18th Avenue, and 6700 Cedar Avenue hereby petition that such public land/easement be vacated by the City of Richfield. *Signature Address (please print clearly) City of Richfield Housing and Redevelopment Authority * Signatures may not be removed after the petition is submitted to the City. Print additional sheets if necessary. Phone (952) 937-5150 7699 Anagram Drive Fax (952) 937-5822 Eden Prairie, MN 55344 Toll Free (888) 937-5150 Phone (952) 937-5150 7699 Anagram Drive Fax (952) 937-5822 Eden Prairie, MN 55344 Toll Free (888) 937-5150 Phone (952) 937-5150 7699 Anagram Drive Fax (952) 937-5822 Eden Prairie, MN 55344 Toll Free (888) 937-5150