04-19-10 agenda packetCITY OF RICHFIELD, MINNESOTA
MONDAY, APRIL 19, 2010
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL COUNCIL CHAMBERS
6700 PORTLAND AVENUE
7:00 P.M.
AGENDA
Call to order
Roll call
1. Approval of minutes of (1) Regular HRA Meeting of February 16, 2010 and (2) Special
HRA Meeting of March 8, 2010
2. HRA approval of agenda
3. Consideration of resolution establishing application and processing fees associated
with various Richfield HRA housing programs
Staff Report No. 16
Notes:
4. Consideration of resolution adopting modification to Redevelopment Plan for Richfield
Redevelopment Project Area and establishment of 2013-'- Housing Tax Increment
Financing District
Staff Report No. 17
Notes:
5. Executive Director report
6. Claims and payroll
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must
be made at least 96 hours in advance to the City Clerk at 612-861-9738.
J
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
February 16, 2010
CALL TO ORDER
The meeting was called to order by Chair Sandahl at 7:00 p.m.
ROLL CALL
HRA Members
Present: Sue Sandahl, Chair; Joan Helmberger; David Gepner, Doris Rubenstein;
and Steven Quam.
Staff Present: John Stark, Acting Executive Director; Karen Barton, Assistant Community
Development Director; and Nancy Gibbs, City Clerk.
Item #1 HRA APPROVAL OF MINUTES
M/Gepner, S/Quam to approve the minutes of (1 ).Special HRA Worksession of January 19,
2010 and (2) Regular HRA Meeting of Januarv 19, 2010.
Motion carried 5-0.
Item #2 HRA APPROVAL OF AGENDA
M/Rubenstein, S/Gepner to approve the agenda.
Motion carried 5-0.
HRA Meeting -2- February 16, 2010
Item #3 PRESENTATION OF PENN CENTRAL ANNUAL REPORT 2009
Commissioner Gepner presented the 2009 Penn Central Annual Report.
Item #4 HRA PROGRAMS 2009 YEAR IN REVIEW
Assistant Community Development Director Barton presented the 2009 Year in Review for
HRA programs.
Item #5 CONSENT CALENDAR
A. Consideration of approval of resolution affirming and ratifying HRA submittal of
application to Hennepin County Housing, Support Services and Transit Coordinated
Request for Proposals for down payment assistance program S.R. No. 7
HRA RESOLUTION NO. 1066
RESOLUTION AFFIRMING AND RATIFYING HOUSING AND REDEVELOPMENT
AUTHORITY STAFF SUBMITTAL OF AN APPLICATION TO THE HENNEPIN
COUNTY HOUSING, SUPPORT SERVICES AND TRANSIT COORDINATED
REQUEST FOR PROPOSALS FOR A DOWN PAYMENT ASSISTANCE PROGRAM
This resolution appears as HRA Resolution No. 1066.
B. Consideration of approval of resolution authorizing purchase of real property located at
6637 Fifth Avenue through New Home Program S.R. No. 8
HRA RESOLUTION NO. 1067
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY
LOCATED AT 6637 5th AVENUE
This resolution appears as HRA Resolution No. 1067.
C. Consideration of approval of resolution authorizing purchase of real property located at
6938-13th Avenue for a Richfield Rediscovered Program project S.R. No. 9
HRA RESOLUTION NO. 1068
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY
LOCATED AT 6938 13TH AVENUE
UNDER THE RICHFIELD REDISCOVERED PROGRAM
This resolution appears as HRA Resolution No. 1068.
HRA Meeting -3- February 16, 2010
D. Consideration of approval of contract with S.R. Stevens Excavating, Inc. for demolition
at 6825 Grand Avenue and 6220-15th Avenue and authorizing staff to contract for any
uncovered abatement costs S.R. No. 10
M/Gepner, S/Helmberger to approve the Consent Agenda.
Motion carried 5-0.
Item #6 CONSIDERATION OF APPROVAL OF REVISIONS TO THE GUIDELINES FOR
THE FORECLOSURE PURCHASE INCENTIVE PROGRAM S.R. NO. 11
Assistant Community Development Director Barton presented Staff Report No. 11.
Commissioner Rubenstein asked if guidelines could be retroactive.
Assistant Community Development Director Barton responded that current guidelines are
not retroactive.
M/Quam, S/Rubenstein to approve revisions to the guidelines for the Foreclosure Purchase
Incentive Program.
Motion carried 5-0.
Item #7 EXECUTIVE DIRECTOR REPORT
Acting Executive Director Stark reported that at the January HRA Meeting the HRA directed
staff to not accept payment of $1,000 for settlement of short sale from property located at 6804
Morgan Avenue but to request up to $2,500 from the bank. Hennepin County had suggested the
City of Richfield accept the $1,000 offer from the bank; Hennepin County said that this is a typical
settlement amount. With directions from the HRA, staff requested $2,500 for settlement and that
amount was agreed upon by the bank.
Acting Executive Director Stark also asked the HRA if they would be available for a special
meeting on March 8.
All commissioners would be available except Commissioner Gepner.
The regularly scheduled March HRA Meeting could possibly be cancelled.
Item #8 CLAIMS AND PAYROLL
M/Sandahl, S/Gepner that the following claims and payrolls be approved:
HRA Meeting -4- February 16, 2010
U.S. Bank 02/16/2010
Section 8 Checks: 118503 - 118635
HRA Checks: 30822 - 30842
TOTAL
Motion carried 5-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:50 p.m.
Date Approved:
$ 170,360.20
$ 31,719.79
$202,079.99
Suzanne M.Sandahl
Chair
Nancy Gibbs
City Clerk
John Stark
Acting Executive Director
J
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Special Meeting
March 8, 2010
CALL TO ORDER
The meeting was called to order by Chair Sandahl at 7:00 p.m.
ROLL CALL
HRA Members
Present: Sue Sandahl Chair; Joan Helmberger; Doris Rubenstein; and Steven
Quam.
HRA Members
Absent: David Gepner.
Staff Present: Steven L. Devich, Executive Director; John Stark, Community
Development Director; Karen Barton, Assistant Community Development
Director; and Cheryl Krumholz, Recording Secretary.
.Item #1 HRA APPROVAL OF AGENDA
Chair Sandahl amended the agenda to include:
• Item #6 -Claims and Payroll
• Item #7 -Executive Director Report
M/Quam, S/Rubenstein to approve the agenda as amended.
Motion carried 4-0.
HRA Special Meeting
-2- March 8, 2010
Item #2 CONSIDERATION OF REVISED RICHFIELD REDISCOVERED CONTRACT FOR
PRIVATE REDEVELOPMENT BETWEEN HRA AND CHARLES ZAWISLAK FOR
REDEVELOPMENT OF 6320 MORGAN AVENUE UNDER RICHFIELD
REDISCOVERED PROGRAM S.R. NO. 12
Community Development Director Stark presented Staff Report No. 12.
M/Helmberger, S/Quam to approve the revised Richfield Rediscovered contract for private
redevelopment between HRA and Charles Zawislak for redevelopment of 6320 Morgan Avenue
under Richfield Rediscovered Program.
Motion carried 4-0.
Item #3 CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF REAL
PROPERTY AT 1407 EAST 66TH STREET UTILIZING PROCEEDS FROM BONDS
OF 1996, PENDING FINDING OF CONSISTENCY FROM PLANNING
COMMISSION S.R. NO. 13
Assistant Community Development Director Barton presented Staff Report No. 13.
Commissioner Rubenstein asked about the price being negotiable.
Assistant Community Development Director Barton explained the use by the City of the
"First Look Program" and the struggles to obtain a purchase agreement because there were
multiple bidders.
Commissioner Helmberger asked about the lot being a commercial use without the house.
Assistant Community Development Director Barton explained the purchase could facilitate
the acquisition of additional properties along 66th Street. The intent is to remove the structure,
clear the land and land bank, probably for several years before there is interest in purchasing due
to the economy.
Chair Sandahl stated this was good HRA planning.
Community Development Director Stark explained the requirements for using the bond
proceeds.
M/Sandahl, S/Quam that the following resolution be adopted and that it be made part of
these minutes:
HRA RESOLUTION NO. 1069
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY
LOCATED AT 1407 EAST 66TH STREET
Motion carried 4-0. This resolution appears as HRA Resolution No. 1069.
HRA Special Meeting
-3- March 8, 2010
Item #4 CONSIDERATION OF RESOLUTION AFFIRMING HRA'S SUPPORT OF HOUSING
DEVELOPMENT CONCEPT AT 6401 LYNDALE AVENUE (WOODLAKE PLAZA)
AND EXPRESSING WILLINGNESS TO FURTHER EXAMINE PUBLIC FINANCING
FOR PROJECT S.R. NO. 14
Community Development Director Stark presented Staff Report No. 14.
Commissioner Quam asked about the process for the Planning Commission's review
before City Council action.
Community Development Director Stark stated that the Planning Commission review is to
determine if the creation of the Tax Increment Financing (TIF) District is in compliance with the
Comprehensive Plan.
Commissioner Rubenstein stated she is not a fan of TIF. She questioned the property
being blighted and if it is, the owners should not be rewarded with TIF for not taking care of the
site. She also stated current tenants had contacted her regarding the owner's lack of seeking
additional tenants.
Community Development Director Stark explained the differences in TIF Districts. A
Housing TIF District does not require blight on substantially substandard structures and its purpose
is to provide 20 - 40% of affordable housing units in the project.
Commissioner Rubenstein asked if the City would offer relocation assistance since
businesses are being displaced.
Community Development Director Stark explained the HRA is not required to provide
assistance because they are not party to the termination of leases.
Terry McNellis, Michael Development, explained the estimated property value for tax
purposes and their financial risk in the project. He added current leases have not been extended.
Commissioner Rubenstein stated she liked the project but has concerns regarding the
length of the TIF District.
Chair Sandahl expressed support for the project and TIF assistance.
Pete Keely, project architect, reviewed the proposed project plans, including exterior and
interior design, amenities, and parking.
Commissioner Quam said the project was a good mix. He asked the developer about
including the three residential lots behind the site.
Mr. McNellis explained that would be a different project than what is proposed. He also
discussed the proposed project's screening for those lots and the consideration of less parking but
with the ability to revisit that later.
Commissioner Quam discussed the issues which should be considered by the Planning
Commission including potential zoning changes, weakening of retail interest, and Master Plan
impacts.
HRA Special Meeting -4- March 8, 2010
M/Quam, S/Rubenstein that the following resolution be adopted and that it be made part of
these minutes:
HRA RESOLUTION NO. 1070
RESOLUTION AFFIRMING SUPPORT FOR THE 90-UNIT HOUSING
DEVELOPMENT CONCEPT FOR THE PROPERTY LOCATED AT 6401
LYNDALE AVENUE AND EXPRESSING A WILLINGNESS TO CONTINUE TO
EXAMINE PUBLIC FINANCING FOR THAT PROJECT AND
RECOMMENDING THE CITY COUNCIL CALL FOR A PUBLIC HEARING ON
THE ESTABLISHMENT OF THE WOODLAKE PLAZA HOUSING TAX
INCREMENT FINANCE DISTRICT
Motion carried 4-0. This resolution appears as HRA Resolution No. 1070.
Item #5 CONSIDERATION OF PROPOSED PRELIMINARY AGREEMENT WITH RON
CLARK CONSTRUCTION AND DESIGN FOR EXPLORING FEASIBILITY OF
REDEVELOPMENT OF 3.5 ACRE PARCEL OCCUPIED BY FORMER RICHFIELD
PUBLIC WORKS MAINTENANCE FACILITY, VACANT HRA-OWNED MORTUARY
BUILDING AND OTHER ADJACENT PROPERTIES AND RIGHT-OF-ENTRY
AGREEMENT FOR USE OF 211 76TH STREET WEST AND 7608 PILLSBURY
AVENUE BY RON CLARK CONSTRUCTION AND DESIGN COMPANY
S.R. NO. 15
Community Development Director Stark presented Staff Report No. 15.
M/Sandahl, S/Helmberger to approve the proposed preliminary agreement with Ron Clark
Construction and Design for exploring feasibility of redevelopment of 3.5 acre parcel occupied by
former Richfield Public Works Maintenance Facility vacant HRA-owned mortuary building and
other adjacent properties and right-of-entry agreement for use of 211 76th Street West and 7608
Pillsbury Avenue by Ron Clark Construction and Design Company.
Motion carried 4-0.
Item #6 CLAIMS AND PAYROLL
M/Rubenstein, S/Quam that the following claims and payrolls be approved:
U.S. Bank 03-08-2010
Section 8 Checks: 118636 - 118766 $ 160,623.60
HRA Checks: 30843 - 30859 $ 64,883.16
TOTAL $225,506.76
Motion carried 4-0.
HRA Special Meeting -5- March 8, 2010
Item #7 EXECUTIVE DIRECTOR REPORT
Executive Director Devich stated the Planning Commission is interested in conducting a
concurrent HRA/Planning Commission worksession in April or May.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:13 p.m.
Date Approved:
Suzanne M. Sandahl
Chair
Cheryl Krumholz
Recording Secretary
Steven L. Devich
Executive Director
AGENDA ITEM # 3
REPORT # 16
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
APRIL 19, 2010
REPORT PREPARED BY:
KAREN BARYON, COMMUNITY
DEVELOPMENT ASSISTANT DIRECTOR
NAngE, TITLE
REPORT PRESENTER:
KAREN BARYON, COMMUNITY
DEVELOPMENT ASSISTANT DIRECTOR
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of a Resolution establishing application and processing fees for various Housing
and Redevelopment Authority housing programs.
I. RECOMMENDED ACTION:
By Motion: Approve the attached Resolution establishing application
and processing fees associated with various Richfield Housing and
Redevelopment Authority housing programs.
II. BACKGROUND
The Richfield Housing and Redevelopment Authority (HRA) operates a number of
housing programs designed to improve the City's housing stock and facilitate
housing opportunities for awide-variety of households. The administration of these
programs involves varying degrees of staff time, materials, and consultant services.
Several of these programs currently have application fees to offset a portion of the
administrative costs associated with the program. However, a number of the
programs have no application fees, requiring the administrative costs to be
absorbed entirely by the HRA.
The HRA and staff recognize the value of these programs to our residents and the
City as a whole. In an effort to ensure the continued operation of these programs,
staff has evaluated administrative costs for each program, including staff time,
041910 Housing Program Application Fees
consultant fees, materials, and is recommending the following application and
processing fees:
• Transformation Home Loan Program: $350 application fee, plus filing fees.
(The HRA currently only charges filing fees.)
• Richfield Rediscovered Direct-Subsidy: $525 application fee, plus filing fees.
(The HRA currently charges a $500 application fee for this program.)
• Richfield Rediscovered Vacant Lot: $250 application fee, plus filing fees.
• Foreclosure Purchase Incentive Program: $150 application fee, plus filing
fees. (The HRA currently does not charge an application fee or filing fees for
this program.)
• New Home Program: Fees waived for affordability programs.
Additionally, staff is recommending an increase in the application fee for
Subordination Requests from $75 to $125, with an additional $25 for subsequent
administrative changes.
The above recommendations are designed to offset a portion of the administrative
fees, on average, for each program.
III. BASIS OF RECOMMENDATION
A. POLICY
• It is appropriate to recover administrative costs as appropriate.
B. CRITICAL TIMING ISSUES
• N/A
C. FINANCIAL
• The HRA is currently paying all administrative costs for housing
programs that do not presently have an application fee.
D. LEGAL
• A Resolution is required to establish fees.
IV. ALTERNATIVE RECOMMENDATION(S~
• Do not approve Resolution.
• Approve Resolution with changes.
V. ATTACHMENTS
• Resolution
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
3I
RESOLUTION NO.
RESOLUTION ESTABLISHING APPLICATION AND PROCESSING FEES FOR
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY PROGRAMS
WHEREAS, the City of Richfield Housing and Redevelopment Authority ("HRA"),
Richfield, Minnesota, administers various grant and loan programs designed to improve
the City's housing stock and provide a range of housing opportunities; and
WHEREAS, the HRA incurs costs directly related to the administration of these
programs; and
WHEREAS, in an effort to ensure continued operation of these programs, the HRA
desires to recoup a portion of the administrative costs;
NOW, THEREFORE BE IT RESOLVED that the HRA shall implement the following
application and processing fees as indicated:
• Transformation Homes Loan program: $350 application fee, plus actual filing
fees;
• Richfield Rediscovered Direct-Subsidy program: $525 application fee, plus
actual filing fees;
• Richfield Rediscovered Vacant Lot program: $250 application fee, plus
actual filing fees;
• Foreclosure Purchase Incentive Program: $150 application fee, plus actual
filing fees; and
• Subordination Requests: $125 application fee, plus an additional $25 fee for
subsequent administrative change requests.
Adopted by the Richfield Housing and Redevelopment Authority of the City of
Richfield, Minnesota this 19th day of April, 2010.
Suzanne M. Sandahl, Chair
ATTEST:
Joan Helmberger, Secretary
AGENpA ITEM # !+
REPORT # j 7
J STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
APRIL 19, 2010
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
JOHN STARK, COMMUNITY DEVELOPMENT
DIRECTOR
NAME. TITLE
JOHN STARK, COMMUNITY DEVELOPMENT
DIRECTOR
A NAME. TITLE
ITEM FOR HRA CONSIDERATION:
Consideration of a resolution adopting a modification to the Redevelopment Plan for the
Richfield Redevelopment Project Area and the Establishment of the 2010-1 Housing Tax
Increment Financing District (aka Woodlake Housing Tax Increment Finance District).
I. RECOMMENDED ACTION:
By Motion: Approve a resolution adopting a modification to the
Redevelopment Plan for the Richfield Redevelopment Project Area
and the Establishment of the 2010-1 Housing Tax Increment
Financina District.
II. BACKGROUND
Michael Development has made a proposal to develop the property at 6401 Lyndale
Avenue (currently designated as Woodlake Plaza) with 90 units of upscale market-
- rate rental housing with an affordable component.
Currently, Woodlake Plaza contains approximately 25,000 square feet of retail
space and contains tenants such as the Donut Connection, Golden Tan, and
Metropolitan Financial Mortgage Company, as well as a number of vacant spaces.
In recent years, occupancy and rental incomes have not been adequate to render
this as a feasible retail development. The developers, who also own the existing
04192010 Woodlake Housing TIF
development, have worked with market analysts to identify the most attractive use
as market-rate rental housing with an affordable component.
The developers have created a concept plan for market-rate rental housing with 20-
40% affordable units on the current site plus the inclusion of a small Housing and
Redevelopment Authority (HRA) owned property that immediately abuts the
Woodlake Plaza Center (515 West 64th Street). Their initial financial analysis,
however, identifies a funding gap for the project. In order to fill the gap, the
developers will be requesting Tax Increment Financing (TIF) for the project in
addition to their infusing more of their own equity than is customary in a
development project.
On March 8, 2010 the HRA passed a resolution affirming its support of the housing
development concept at 6401 Lyndale Avenue (Woodlake Plaza) and expressing its
willingness to further examine public financing for that project. That resolution also
recommended that the City Council make a Call for a Public Hearing to consider the
modification of the Richfield Redevelopment Project Area and Creation of the
Woodlake Housing Tax Increment Financing District.
On March 9, 2010 the City Council made a call for a Public Hearing to be held
before the Council on April 27, 2010 regarding this potential TIF District. As
required by Minnesota Statutes, the Planning Commission adopted a resolution
finding that a modification to the Richfield Redevelopment Project Area
Redevelopment Plan and the establishment of the 2010-1 Woodlake Housing TIF
District and TIF Plans and the disposition of the HRA owned property located at 515
West 64th Street all conform to the Richfield Comprehensive Plan.
The amount of TIF that the project is anticipated to generate is estimated at
$979,226 (net present value) under a .05% inflation model. The proposed use (in
cumulative net present value) of the TIF is as follows:
^ $3,525 to the state auditor for administrative costs (required);
^ $97,950 to the Richfield HRA for administrative costs (primarily consulting
costs and staff salaries);
^ $822,000 to the developer for reimbursement of eligible costs;
^ $56,131 to the Richfield HRA for payment of the HRA owned property at 515
West 64th Street.
The HRA's public finance consultants Ehlers and Associates (Ehlers) have
estimated that the existing development will provide $21,400 in tax revenues to the
City of Richfield in 2010; this represents a 3% reduction in Richfield tax generation
from the previous year. Ehlers estimated Richfield's "base" tax revenues for the
proposed development at $14,080 in 2011 -this is a $7,320 reduction from the
current taxes because the Class Rate of the proposed residential development is
lower than that of the existing commercial development. If the TIF District were
approved, the HRA would receive an estimated annual payment of $8,288 for
administration of the TIF District. If the development were to appreciate in market
value by .05% annually, there would be sufficient TIF proceeds to reimburse the
Richfield HRA for the value of the property it owns at 515 W. 64th Street. Under
this scenario, the City would collect its "base" taxes of $14,080 and the HRA would
receive $8,288 in TIF to cover its administrative costs and an average annual
payment of $2,250 for reimbursement for the cost of the HRA owned lot. The
grand total of annual funds to be received under the proposed financing model,
therefore, would be $24,618 compared to the $21,400 projected to be collected if
the existing development were to remain.
The tax increment being sought is in the form of a "Pay-As-You-Go Note," meaning
that the developer would only receive tax increment to the level that the property tax
payments would support. In the event that there were insufficient tax revenues to
supply the requested TIF to the developer, the HRA would be under no obligation to
do so. The HRA and state auditor would receive their administrative portions of the
tax increment prior to disbursing any TIF to the developer. The only risk to the
HRA would be that, if the development does not appreciate by .05% per year, there
may be insufficient funds to reimburse the cost of the HRA owned lot at 515 W. 64th
Street. If the development were to inflate at a higher rate, the TIF District could be
retired sooner.
A Housing TIF District differs significantly from a Redevelopment TIF District (which
has been the predominant type of TIF District in Richfield in the past). Unlike a
Redevelopment District, a Housing TIF District does not require that the property be
"blighted" or "substandard." The Primary criteria for a Housing TIF District is that
20% of the units be affordable to households at or below 50% of the area median
income or that 40% of the units be affordable to households at or below 60% of the
area median income (or a combination thereof). Appendix E of the attached TIF
Plan provides those income levels for various sized families. As of the last census
(2000), 60% of Richfield's apartment tenants were earning less than the median
income; so the development of an apartment complex serving 20% - 40% of its
tenants earning below-the area median income would not be inconsistent with the
existing rental housing in the community. The only other recent non-age, restricted
apartment development in Richfield is the Oaks on Pleasant development which is
required to provide 20% of its units to families in need of affordable housing.
III. BASIS OF RECOMMENDATION
A. POLICY
• The Planning Commission has found that the proposed housing
development is consistent with Richfield's Comprehensive Plan.
• The developer has indicated, and the HRA's Financial Consultant has
concurred, that it would not be feasible to develop the proposed rental
housing complex without TIF of at least $822,256 (net present value).
• The proposed development would conform to the requirements of a
Housing TIF District.
• The HRA must approve the creation of a new TIF District and the
modification of the Redevelopment Area and Plan.
B. CRITICAL TIMING ISSUES
• The City Council is scheduled to hold a Public Hearing related to this
matter on Tuesday, April 27, 2010. The attached HRA resolution is
contingent on the approval of the Redevelopment Area Modification
and the TIF Plan Creation.
C. FINANCIAL
• The developer is seeking up to $822,000 in TIF;
• Under a .05% inflation model, there would be sufficient tax increment
generated by the proposed development to provide the requested
financing to the developer in addition to providing 10% of the
increment generated to the HRA for administrative costs, .36% to the
state auditor for administrative costs and a net present value of over
$56,000 to the HRA as payment for the HRA owned property at 515
West 64th Street.
Although the analysis done to date assumes a .05% inflation increase,
the Estimated Cash Flow of the Tax Increment (Appendix D) shows a
1.5% inflationary factor. This is done in order to give the budget
flexibility in capturing additional tax increment generated by inflation
between .05% and 1.5% in a given year in order to make full payment
for 515 West 64th Street earlier and/or meet the obligation to the
developer earlier in order to decertify the district as soon as possible.
Although the developer has requested up to $822,000 in TIF, the TIF
Plan identifies $1.4 million in eligible TIF Costs in the budget (at the
top of page 2-6).
To date, the developer has reimbursed the HRA an amount of $5,000
for costs incurred in this project.
D. LEGAL
• Legal staff has reviewed the modification to the Richfield
Redevelopment Project Area Redevelopment Plan and the
establishment of the 2010-1 Woodlake Housing TIF District and TIF
Plans and the attached resolution.
IV. ALTERNATIVE RECOMMENDATION(S~
• Continue this item until a later meeting;
• Approve the attached resolution with modification intended to meet the
concerns of the HRA;
• Do not approve the attached resolution.
V. ATTACHMENTS
• Resolution.
• A Modification to the Richfield Redevelopment Project Area Redevelopment
Plan and the Tax Increment Financing Plan for the establishment of the
2010-1 Woodlake Housing TIF District.
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Rebecca Kurtz from Ehlers and Associates.
Representatives of Michael Development.
~-i
RESOLUTION NO.
RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT
PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE
ESTABLISHMENT OF THE 2010-1 HOUSING TAX INCREMENT FINANCING
DISTRICT (WOODLAKE HOUSING)
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
the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) and adopt the Tax
Increment Financing Plan (the "TIF Plan") (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, 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 City Council schedule a public
hearing on the Plans upon published notice as required by law.
NOW, THEREFORE, BE IT RESOLVED:
1, The HRA hereby finds that the Plans, are intended and, in the judgment of this
Board, the effect of such actions will be, to provide an impetus for development in the public
purposes and accomplish certain objectives as specified in the Plans, which are hereby
incorporated herein;
2. The HRA also finds the 2010-1 Housing Tax Increment Financing District
(Woodlake Housing) is in the public interest and is a "housing district" under Minnesota
Statutes, Section 469.174, Subd. 11 of the Act;
3. 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;
4. The boundaries of the Project Area are not being expanded;
5. The reasons and facts supporting the findings in this resolution are described in
the TIF Plan and in the exhibit attached to the City resolution approving the Plans, on file in City
Hall;
6. Conditioned upon a review by the City's Planning Commission and a finding of
y a-
the Planning Commission that .the Plans conform to the general plan for development and
redevelopment of the City and the approval thereof by the City Counci! 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 Community Development
Director;
7. Upon the satisfaction of the conditions described above, 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 Community Development
Director 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; and
9. The Community Development Director 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 of Commissioners of the Richfield Housing and Redevelopment
Authority this 19th day of April, 2010.
Suzanne M. Sandahl, Chair
ATTEST:
Joan Helmberger, Secretary
~.
As of April 13, 2010
Draft for Public Heuf°ing
Modification to the Redevelopment Plan
for the Richfield Redevelopment Project Area
and the
Tax Increment Financing Plan
for the establishment of
the 2010-1 Housing Tax Increment Financing District
(Woodlake Housing)
(a housing district)
with i n
the Richfield Redevelopment Project Area
Richfield Housing and Redevelopment Authority
City of Richfield
Hennepin County
State of Minnesota
Public Hearing: April 27, 2010
Adopted:
E H L E RS 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
Foreword ............................................................. 1-1
Section 2 -Tax Increment Financing Plan
for the 2010-1 Ho using Tax Increment Financing District (Woodlake Housing)
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 ........................................... 2-3
Subsection 2-9. Sources of Revenue/Bonds to be Issued ...................... 2-4
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 ....................................... 2-7
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions ................. 2-8
Subsection 2-15. Supporting Documentation ................................. 2-9
Subsection 2-16. Definition of Tax Increment Revenues ....................... 2-10
Subsection 2-17. Modifications to the District ................................ 2-10
Subsection 2-18. Administrative Expenses .................................. 2-10
Subsection 2-19. Limitation of Increment ................................... 2-11
Subsection 2-20. Use of Tax Increment .................................... 2-12
Subsection 2-21. Excess Increments ...................................... 2-13
Subsection 2-22. Requirements for Agreements with the Developer .............. 2-13
Subsection 2-23. Assessment Agreements ................................. 2-13
Subsection 2-24. Administration of the District ............................... 2-13
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 ................. 2-14
Subsection 2-28. Summary .............................................. 2-14
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
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 2010-1 Housing Tax Increment Financing District (Woodlake Housing.
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 HRA Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area 1-1
Section 2 -Tax Increment Financing Plan
for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing)
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 ofthe 2010-1 Housing
Tax Increment Financing District (Woodlake Housing) (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
469.1799, 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 3 parcels of land and adjacent and internal rights-of--way. The District is
being created to facilitate the construction of a 90-unit, market rate housing development with an affordable
component in the City. Please see Appendix A for further District information. The HRA has not entered
into an agreement at the time of preparation of this TIF Plan, but development is likely to occur in summer
2010. The HRA anticipates entering into an agreement with Michael Development. 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 currently owns one parcel of property within the
District. 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
legal requirements, the HRA or City may sell to a developer selected properties that it owns
or 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.
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-1
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 currently owns one parcel to be included in the District.
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.ll:
"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
HousingAct of 1959, the United States HousingAct of 1937, as amended, Title V of the HousingAct
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
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 46X.02 Subd 9, clause (e).
(c) For purposes of the requirements ofparagraph (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 ofparagraph (a), clause (2),if it is
treated as a separate building, the addition was not contemplated by the tax increment
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-2
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(fl 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 3 parcels.
• The development will consist of 90 units ofmulti-family rental housing.
• 20% of the units will be occupied by person with incomes less than 50% of 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 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 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. 1 b.,
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 2013, 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
2038, or when the TIF Plan is satisfied. The HRA or City reserves the right to decertify the District prior to
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
If the request for certification of the District is filed prior to July 1, 2010, pursuant to M. S. Section 469.174,
Subd. 7 and M.S. Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) for the parcels owned by
the developer will be based on the market values placed on the property by the assessor in 2009 for taxes
payable in 2010 and if the request for certification of the District is filed on or after July 1, 2010, the ONTC
of the parcels owned by the developer will be based on the market values placed on the property by the
assessor in 2010.
The HRA parcel within the District is currently exempt from property taxes. If the HRA conveys its parcel
to the developer in calendar year 2010, the ONTC of the parcel will be based on the market value placed on
the property by the assessor as of January 2, 2010 for taxes payable in 2011. If the HRA conveys its parcel
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-3
to the developer on or after January 2, 2011, the assessor will determine the market value of the property at
the time of transfer of the parcel.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2013) 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 2010, assuming the
request for certification is made before June 30, 2010. 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 2013. The Project
Tax Capacity (PTC) listed is an estimate of the captured tax capacity of the District in the final year of
collection of tax increment (year 26 of the District).
Project Estimated Tax Capacity upon Completion (PTC) $146,908
Original Estimated Net Tax Capacity (ONTC) $29,363
Fiscal Disparities Reduction
$0
Estimated Captured Tax Capacity (CTC) $117,545
Original Local Tax Rate 1.25524 Estimated
Pay 2010
Estimated Annual Tax Increment (CTC x Local Tax Rate) $147,547
Percent Retained by the HRA 100%
*Tax capacity includes a 1.5% inflation factor for the duration of the District. The tax c~appacity included in
this chart is the estimated tax capacity of the District in year 26. The tax capacity of the District m year one
is estimated to be $101,250.
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.
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-4
The City is reviewing the area to be included in the District to determine if any 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 issue bonds or incur other indebtedness as a result of the
TIF Plan. As presently proposed, the project within the District will be financed by apay-as-you-go note.
In addition, the HRA may enter into an interfund loan pursuant to M.S. Section 469.178 to reimburse itself
for funds advanced for the project through the conveyance of land to a developer for less than fair market
value. Additional indebtedness may be required to finance other authorized activities. The total principal
amount of bonds to be issued, or other indebtedness related to the use of tax increment financing, will not
exceed $1,627,650 without a modification to the TIF Plan pursuant to applicable statutory requirements. It
is estimated that $1,527,650 in apay-as-you-go note will be financed with tax increment revenues. It is
estimated that an interfund loan of $100,000 will be adopted to pay for HRA land costs and financed through
tax increment revenues. 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 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.
The total estimated tax increment revenues for the District are expected to be approximately $3,036,000, as
shown in the table below:
SOURCES OF FUNDS TOTAL
Tax Increment $3,036,000
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 $1,627,650. 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 this
modification.
Subsection 2-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate the construction of a 90-unit, market
rate housing development with an affordable component. The HRA and City have determined that it will be
necessary to provide assistance to the projects 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 HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-5
USES OF TAX INCREMENT FUNDS TOTAL
LandBuilding Acquisition $1,000,000
Site Improvements/Preparation $324,050
Public Utilities $0
Public Parking Facilities $0
Streets and Sidewalks $0
Administrative Costs (up to 10%) $303,600
PROJECT COST TOTAL $1,627,650
Interest $1,408,350
PROJECT AND INTEREST COSTS TOTAL $3,036,000
For purposes of OSA reporting forms, uses of funds include interfund loans, bond principal, TIF Note
principal, and transfers, ali in the principal amount of $1,627,650. These amounts are not cumulative, but
represent the various forms of"bonds" included within the concept ofbonded indebtedness under the TIF Act.
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 Appendix D.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan unless the estimate of the cost of the project, including administrative costs, increases. 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, (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
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-6
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 City will choose to calculate fiscal disparities by clause b. However, it is not anticipated that the
District will contain commercial/industrialprnperty. As a result, there should be no impact due to the
fiscal disparities provision on the District.
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).
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 (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.
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-7
(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; and
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration.
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. 1 a, 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. Through an analysis of the project financials, a
financing gap exists and assistance is needed to move the project forward. The estimated fiscal impact of the
District would be as follows if the "but for" test was not met:
IMPACT ON TAX BASE
Estimated Estimated Captured
2009/Pay 2010 Tax Capacity (CTC) Percent of CTC
Total Net Upon Completion to Entity
Tax Capacity
Hennepin County 1,444,128,268 117,545 0.0081%
City of Richfield 26,887,191 117,545 0.4372%
Richfield ISD No. 280 35,305,263 117,545 0.3329%
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-8
IMPACT ON TAX RATES
Estimated Pay 2010 Percent Potential
Extension Rates of Total CTC Taxes
Hennepin County 0.425610 33.91 % 117,545 50,028
City of Richfield 0.498290 39.70% 117,545 58,571
Richfield ISD No. 280 0.249730 19.90% 117,545 29,355
Other 0.081610 6.50% 117,545 9,593
Total 1.255240 100.00% 147,547
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the estimated Pay 2010 rate. The total net capacity for the entities listed above are
based on estimated Pay 2010 figures. The District will be certified under the actual Pay 2010 rates, 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 $3,036,000;
(2) Probable impact of the District on citesprovided services and ability to issue debt. The probable
impact of the District on police protection is not expected to be significant. With any addition of new
residents or businesses, police calls for service will be increased. The City does not expect that the
proposed development, in and of itself, will necessitate new capital investment in vehicles or
facilities.
The probable impact ofthe District on fire protection is not expected to be significant. Typically new
buildings generate few calls, if any, and are of superior construction. The City may have a slight
increase in medical related calls; however, the development is not expected to require an increase in
capital investment in vehicles or facilities.
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
will contribute 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.
(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 $763,230;
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-9
(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 ofthe total local tax rate for all taxing jurisdictions remained the same is $1,300,728;
(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 findings that 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:
• Application from Michael Development, January 15, 2010.
• Market Study by Maxfield Research, June 4, 2008.
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 ofM.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 ofthe cost ofthe 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,
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-10
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(~, 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 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 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:
Amounts paid for the purchase of land;
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;
Relocation benefits paid to or services provided for persons residing or businesses located in the
District; or
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
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
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
ofM.S., Section 469.176, Subd. 3. The county may require payment ofthose expenses by February 15 ofthe
year following the year the expenses were incurred.
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-11
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 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
incrementfinancingdistrictpursuanttoM.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 ofthe 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 thatparcel
including qualified improvement of a street adjacent to that parcel, in accordance with the
tax incrementfinancingplan, 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 incrementfinancingdistrict. 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 Apri12014
and report such actions to the County Auditor.
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 ofthe Richfield Redevelopment Proj ect 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;
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-12
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 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.
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, Subc1. S, no more than 10 percent, by acreage, of the property to be
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-13
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. S 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 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. 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 ofthe feasibility
of developing the project site(s) within the District.
Subsection 2-27. Other Limitations on the Use of Tax Increment
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 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.
Richfield HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-14
2. Housing District Exceptions to Restriction on Pooling; Five Year Limit. Tax increment derived from the
District must be used solely to finance the cost of housing projects (including administrative expenses
and public improvement costs) as defined in M.S. Section 469.174, Subd. 11 and subject to the
requirements set forth in M.S. Section 469.1761.
Pursuant to M.S. Section 469.1763, Subd. 3 (the "Five Year Rule"), expenditures of tax increment for
housing purposes within the Richfield Redevelopment Project Area are considered to be an activity
within the District, and therefore, such costs may be reimbursed with tax increment without regard to the
Five Year Rule.
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 HRA Tax Increment Financing Plan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing) 2-15
Appendix A
Project Description
The 2010-1 Housing TIF District is being established to redevelop the Woodlake Plaza Shopping Center,
which is currently a commercial center. According to Michael Development, the property is .obsolete as a
retail building.
The Lyndale Commons development will be located on 2 parcels currently owned by the developer and 1
parcel currently owned by the HRA.
The Lyndale Commons development will consist of 90 units of rental housing. Currently the plan will
include nine studio apartments, forty-two one bedroom apartments, thirty-five two bedroom apartments and
four three bedroom apartments. It is planned that 20 percent of the units will be affordable at 50 percent of
median income. The current design provides two three-story elements defining the edge of Lyndale Avenue.
Between these two elements, there is a landscaped courtyard that will provide a very "liveable" amenity for
the resident, and will provide green space along Lyndale Avenue. Parking is available with sixty-nine below
grade and sixty-five above grade stalls.
It is anticipated that the developer will be issued apay-as-you-go note. In addition, the HRA will be paid for
the property it owns within the District that it conveys to the developer. It is estimated that the fair market
value is $80,000; however an appraisal will be completed to determine the actual value.
Appendix A-1
Appendix B
Map of the Richfield Redevelopment Project Area and the District
Appendix B-~
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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
27-028-24-23-0092 6401 Lyndale Avenue South Woodlake Plaza Partnership
27-028-24-23-0060 521 64"' Street West Woodlake Plaza Partnership
27-028-24-23-0059 515 64`" Street West Richfield HRA
Appendix C-1
Appendix D
Estimated Cash Flow for the District
Appendix D-1
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Appendix E
Housing Qualifications for the District
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No. of Persons 50% of Median Income 60% of Median
Income
1-person $29,350 $32,285
2-person $33,550 $36,905
3-person $37,750 $41,525
4- erson $41,950 $46,145
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 2009. UPDATED NUMBERS FOR THE YEAR 2010 WILL BE
AVAILABLE IN MARCH AND WILL BE UPDATED PRIOR TO THE PUBLIC HEARING FOR THE
TIF DISTRICT.
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 the
2010-1 Housing Tax Increment Financing District (Woodlake Housing) as required pursuant to Minnesota
Statutes, Section 469.175, Subdivision 3 are as follows:
1. Finding that the 2010-1 Housing Tax Increment Financing District (Woodlake Housing is a housing
district as defined in M.S., Section 469.174, Subd. 11.
The 2010-1 Housing TIF District (Woodlake Housing) consists of three parcels. The development will
consist of 90 units of rental housing. 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 20 percent of the units receiving assistance will have incomes at or below 50 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 reasonablyforeseeable 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 and site and public improvements makes
this housing development infeasible without City assistance. Due to the high cost of building affordable
new housing in the City and the cost of financing the proposed public improvements, this project is
feasible only through assistance, in part, from tax increment financing. The developer was asked for and
provided a letter and a proforma as justification that the developer would not have gone forward without
tax increment assistance (see attachment in Appendix F of the TIF Plan).
This finding is justified on the grounds that the cost of land acquisition and site and public improvements
add to the total development cost. Historically, site development costs in this area have made
development infeasible without tax increment assistance. This site has been owned and operated by
Michael Development for over 17 years. The site is currently 49% vacant, despite extensive leasing
efforts and installation of a new fag~ade and sign band in 2003. In addition, the HRA site has been
vacant for several years and was purchased by the HRA in 2007, at which time it became tax exempt.
The City reasonably determines that no other development of similar scope is anticipated on this site
without substantially similar assistance being provided to the development. The City has relied upon
budgetary figures and cost estimates submitted by the developer for the development of the proposed
rental housing. These analyses show that in order to promote the development of affordable housing in
the City, financial assistance is needed to reduce the costs of land acquisition. The construction of the
proposed housing is cost prohibitive without the use of tax increment due to several factors, including
the following: (1) the difficulty in obtaining low cost financing in the current economic market; (2) the
cost of acquisition; (3) affordable housing does not generate sufficient revenues to offset the increased
start up costs. The tax increment derived from the TIF District will be used to reimburse the HRA for
land acquisition and assist with the refinancing of the other two parcels. With this assistance, the land
can be provided to the developer at a significantly reduced cost and therefore help the developer bridge
the gap in financing the project.
3. Finding that the TIFPIan for the 2010-1 Housing Tax Increment Financing District (Woodlake Housing)
conforms to the general plan for the development or redevelopment of the municipality as a whole.
Appendix F-1
The Planning Commission met on March 22, 2010, and reviewed the TIF Plan and found that the TIF
Plan conforms to the general development plan of the City.
4. Finding that theTlFPlanforthe2010-1 Housing Tax lncrementFinancingDistrict(WoodlakeHousin~
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.
Appendix F-2