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09-10287rRESOLUTION NO. 10287 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR RICHFIELD REDEVELOPMENT PROJECT AREA AND ESTABLISHING THE HOUSING TAX INCREMENT FINANCING DISTRICT 2009-2 (FORMER GARAGE SOUTH PORTION) THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR SE IT RESOLVED by the City Council (the "Council"} of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Board of Commissioners of the Richfield Housing and Redevelopment Authority (the "HRA") has heretofore established the Richfield Redevelopment Project Area and adopted a Redevelopment Plan therefor. It has been proposed by 'the HRA and the City that the City adopt a Modification to the Redevelopment Plan, for Richfield Redevelopment Project Area (the "Redevelopment Plan Modification") and establish the'Housing Tax Increment Financing District 2009-2 (Former Garage South Portion) (the "District") therein and adapt 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 469.1799, all inclusive, as amended, (the "Act") all as reflected in the Plans, and.presented for the Council's consideration. 1:02. The HRA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The HRA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoptiori.and approval of the proposed Plans, including, but not limited to, notification of Hennepin County and Independent School District No. 280 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, approval of the Plans by the HRA on August 17, 2009, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to the basis for the other findings. and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05. The City is not modifying the boundaries of Richfield Redevelopment Project Area, but is however, modifying the Redevelopment Plan therefor. Section 2. Findings for the Adoption and Approval of the Plans. 2.01: The Council hereby finds that the Plans aze intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public interest and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of the Housing Tax Increment Financing District 2009-2 (Former Garage South Portion). 3.01. The Council hereby finds that the Housing Tax Increment Financing District 2009-2 (Former Garage South Portion) is ~in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 11 of the Act. 3.02. The Council further, finds that the proposed development would not occur solely through private invesrinent within the reasonably foreseeable future that the Plans conform to the general plan for the development or redevelopment of the City as a whole;. and that the Plans 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: 3.03. The Council furtherr finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. Section 4. Public Purpose. 4.01. The adoption of the Plans conform in all respects to the requirements of the Act and will help fulfill a need for affordable housing in the City and, to provide housing opportunities for the disabled which may not otherwise be provided, and thereby serves a public purpose. For the reasons described in Exhibit A, the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make this development financially feasible. As such, any private benefits received by a developer are incidental and do not outweigh the primary public benefits. Section 5. Approval and Adoption of the Plans. 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Community Development Director. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the Richfield Housing and Redevelopment Authority is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 1 S months immediately preceding the adoption of this resolution. 5.04. The Community Development Director is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. Approved by the Richfield City Council this the 8th day of September, 2009. (Seal) EXHIBIT A RESOLUTION NO. 10287 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the Housing Tax Increment Financing District 2009-2 (Former Garage South Portion) as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that theHousing Tax Increment Financing District 2009-2 (Former Garage South Portion) is a housing district as defrned in M.S., Section 469.174, Subd. 11. The Housing TIF District 2009-2 (Former Garage South Portion} consists of one parcel. The development will consist of rental housing for adults with disabilities. All or a portion of the units which will receive tax increment assistance will meet income restrictions described in M.S. 469.1761 for the duration of the District. At least. 40 percent of the units. receiving assistance will have incomes at or below 60 percent of statewide median income. Appendix 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. The cost of land acquisition makes this housing development infeasible without City assistance. Due to the high cost of building affordable new housing in the City this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter as justification that the developer would not have gone forward without tax increment assistance. Historically, site development costs in this area have made development infeasible without tax increment assistance. The City reasonably determines that no other development of similar scope is anticipated in the next years on this site without substantially similar assistancebeing provided to the development. The City has relied upon budgetary figures and cost estimates submitted by the developer for the development of the proposed housing development. These analyses show that in order to promote the development of additional affordable housing in the Ciry, financial assistance is needed to reduce the costs of acquiring the land for the development. The construction of the proposed housing development to serve the City is cost prohibitive without the use of Tax Increment, due to several factors, including (i) the difficuIry in obtaining sufficient low cost financing in the current economic market; (ii) the additional casts of building the proposed housing development in an area which is already established as a residential area, including the increased costs for }and acquisition, and (iii} affordable housing does not generate sufficient revenues to offset these increased start up costs. In order to make the proposed housing development economically feasible, the developer has obtained aloes-interest loan from the Department of Housing 'and Urban Development. The tax increment derived from the TIF District will be used to reimburse the City for land acquisition, so the land can be provided to the developer at a significantly reduced cost and therefore will help the developer bridge the gap in financing for the housing project. 3. Finding that the TIF Plan for the Housing Taz Increment Financing District 2009-2 (Former Garage South Portion) conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission met on July 27, 2009, and 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 Housing Tax Increment Financing District 2D09-2 (Former Garage South Portion) 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. Through the implementation of the TIF Plan, the HRA and City will provide an impetus for affordable residential development, which is desirable or necessary. for increased population and an increased need for life-cycle housing within the City.