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10-07-85 agenda~~ / HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 55 Agenda October 7, 1985 Housing and Redevelopment Authority Commissioners City of Richfield Subject: The Interstate-Lyndale-Nicollet Redevelopment Project Plan and Tax Increment Financing District Plan Dear Commissioners: This letter is accompanied by the above identified Plans. The Plans are presented for your review and discussion. If the HRA determines they are acceptable, it would be appropriate to authorize the Executive Director to transmit them to the Planning Commission. Tree Planning Commission would be requested to review the Proposed Land Use Plan and Proposed Acquisition Plan whicr< are components of the above Plans to determine their conformance with the City's Comprehensive Plan. The findings of the Planning Commission will probably be available for the October 21, 1985, HRA meeting. At that. meeting, the HRA will be requested to take formal action to approve the Plans. They would then be forwarded to the City Council for action if the HRA responded favorably. The Redevelopment Plan and Tax Increment Financing District Plan meet the statutory requirements for the establisr~ment of a redevelopment project and a tax increment financing district. Tr~ese Plans are the means by which the Interstate-Lyndale- Nicollet Planning study formulated by the consulting firm of BRW may be implemented. The ILN Land Use Plan and Phase I Development Plan, which are the focal point of the BRW study, were presented to the HRA, City Council and Planning Commission on September 16, 1985. The Land Use Plan and Development Plan were the result of the study initiated by BRW in March of this year. Back in March of 1985, it was anticipated that the ILN Plan prepared by BRW would be completed first. Then, the redevelopment project process would be initiated. However, because of the significant development proposed by CDR Investments and the Hampton Inn proposal, and, the discussions in Congress regarding placing limits on bond financing, staff has taken the initiative by proceeding with the preparation of redevelopment project document immediately. Also presented at the September 16, 1985, HRA meeting in Letter No. 49, was the revised time schedule for considering the establishment of a Redevelopment Project and Tax Increment Financing District. With the support of the HRA, City. Council, /-~ -2- and Planning Commission, it may be possible to adhere to that schedule and close on a tax increment bond sale prior to December 31, 1985. During the initial period of the BRW study, it became apparent that resolving circulation issues was the key to improving the ILN area. Thus, a circulation plan was formulated. That plan was presented to that HRA and City Council on July 1, 19$5, and subsequently to the ILN Advisory Committee. That plan is presented on page 3$ in the Redevelopment Plan section titled Physical Inventory and Analysis/Land Use•and Related Issues in the form of a map entitled Land UselCirculation.Plan. (Several sections of the Redevelopment Plan and Tax Increment District Financing Plan discuss the same information. In this letter only the Plan which first discusses the relevant proposal or concept will be referenced). The Land Use/Circulation Plan map also contains a recommendation that the land use in the planning area be designated commercial. Thus limiting new development to commercial uses. Goals and objectives for achieving the redevelopment of the area according to the Land Use/Circulation Plan are discussed on pages 10 through 15. Capital projects which would intitiate the implementation of the Land Use/Circulation Plan are identified as the Phase I Development Program. If the Redevelopment Project and Tax Increment. Financing District are established, additional capital projects would be developed over a period of several years in successive phases., The Phase I Development Program is graphically represented in a map on page 17. A description of the private and public activities proposed for Phase I appears on pages 16 through 24. These activities include the construction of the CDR office/ramp/hotel proposal and the Hampton Inn proposal. The HRA and City would work cooperatively to upgrade and realign 77th Street east and west of Lyndale Avenue, to upgrade Lyndale Avenue for both vehicular and pedestrian traffic, widen the Lyndale Avenue bridge,~and provide improved off-street parking in three areas along Lyndale Avenue north of 77th Street in an area which is also proposed for renovation as a community oriented commercial area. The area east and west of Lyndale Avenue and south of 77th Street would be redeveloped. In addition to the construction proposed for Phase I, detailed comprehensive plans would be formulated for the renovation and redevelopment areas to guide .these activities and provide a basis for successive Phases of development. "'~ `.rralement the public development activities, property would be a,~quired by the HRA. The Redevelopment Plan section titled Acquisition, Relocation, and Clearance Activities, pages 24 through 28, contains a map identifying the property proposed for purchase as well as a list identifying by address the property proposed for acquisition. The proposed Tax Increment Financing District Plan on pages 53 through 55 discusses the relocation process to be followed. As its name implies, the proposed Tax Increment Financing District Plan discusses the use of tax increment and other -3- /- ;~ revenues to fund the public improvements, At the September 16, 1985, HRA meeting, Letter No. 48 entitled Report on Financing Alternatives Study for Proposed Project Improvements and Development was presented. It concluded that there were probably five viable sources of funding for the proposed Phase I Development Program. Tax Increment was the only revenue source which had the potential of providing funds in the amounts needed to proceed. In the Tax Increment District Financing Plan, Exhibit IX titled Anticipated Source of Funds on page 66 indicates the likely sources and amounts of revenue available to fund the public improvements. It indicates that $21,820,000 may be available but that the budget estimates only $21,189,490 may be needed. Exhibit VIII titled Project Costs by Line Item, page 65 is the proposed budget. Note that there is an appendix which discusses the basis for the budget numbers. The source and use tables are a part of a section titled Tax Increment Financing Plan which begins on page 64. It indicates that the tax increment cash flow for funding Phase I is based on the construction of development valued at approximately $74.6 million. The Hampton Inn proposal is valued.. at approximately $3.8 million and the CDR propsoal is valued at approximately $70.8 million. These values appear on page 70 in Table 4. The tax increment cash flow section beginning. on page 71 discusses the assumptions made for the cash flow and contains a cash flow print-out prepared by Evensen-Dodge. At their August 29th meeting, the ILN Advisory Committee adopted a motion which supported the BRW Land Use/Circulation Plan and Phase I Development Program and Public .Improvements Plan. Fifteen of the twenty-five members were present and the vote was unanimous. Tl^<e motion was as follows: The ILN Advisory Committee: a. agrees with the proposed Phase I Plan and long range redevelopment strategy; b. supports the use of tax increment financing to implement the proposed activities; c. feels the people in the area should, from time to time, be apprised of the schedule and activites related to the. implementation of Phase I; d. urges the City Council to pursue, with r~aste, the upgrading of 77th Street to Nicollet Avenue; e. recommends the business people being displaced be informed of opportuntiies to rebuild within the project area; f. believes the location, use and design of the "Focal Area" at the southwest corner of 77th Street and Lyndale Avenue should be re-evaluated; and, g. requests the City Council to amend the charge to this Advisory Committee so it (the Committee) may continue to function during the Plan implementation phase. Minnesota statutes provide Richfield with a way to implement the Land Use/Circulation Plan and Phase I Development Program formulated by BRW and recommended by the Advisory Committee. _q_ ~-~ That is through the establishment of a Redevelopent Project and Tax Increment Financing District. This proposed Redevelopment Project Plan and proposed Tax Increment Financing District Plan respond to the requirements of the law. By accepting these plans on October 7th and requesting the Planning Commissions opinion regarding their conformance with the Comprehensive Plan, it would be possible for the HRA to take formal action on the document on October 21, 1985. If the HRA approved the Plans, they would request the City Council to schedule a public hearing and consider approving the Plans as well. If the Council agrees to a hearing, a likely date would be November 12, 1985. The request of the HRA to the City Council to schedule a hearing and approve the Plans may also be accompanied by a request to authorize a bond sale in late November or early December. As discussed earlier in this letter, the opinion of the Planning Commission must be sought regarding the Redevelopment Project Plan and Tax Increment Financing District Plan and their conformance. with. the Comprehensive Plan. It is likely that the Planning Commission will find the Redevelopment Project Plan and Tax Increment Finance District Plan not in conformance with the Comprehensive Plan. The proposed upgrading of 77th Street is not in conformance. However, it is also likely. they will begin the process to amend the Comprehensive Plan. The finding of'non-compliance need not delay the processing of the Plans by either the HRA or the City Council. It is recommended. that the HRA authorize the Executive Director to request the Planning Commission, at its October 8th meeting, to provide their findings as to the conformance of the proposed Redevelopment Project Plan and Tax Increment Financing District Plan and specifically those sections dealing with the Land Use/Circulation Plan and Acquisition Plan with the Comprehensive Plan. ectf John G. Car Executive D JGC/eja fitted, ~~~2~i Wright rector.