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V.1. Modification to the Redevelopment Plan for Redevelopment Project No. 1 - Tax Increment Financing (TIF) Plan for TIF District No. 1-5; Elverum (CR2016-012)� City oF Hopkins January 26, 2016 Council Report 2d1 f-012 MUDIF�CATI�N TCa THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT N4. 1/TAX INCREMENT FINAN�ING (TIF) PLAN FOR TIF DISTRICT NO. 1-5 Proposed Action StafF recommends approval of the #ollowing motion follvwing the public hearing: Move to adopt Resolution 2016-08 ado tin a modification to the redev�lo ment Gan f4r Redevelo ment Pro'ect No.1; estabfishinq Tax Increment Financing District No 1-5 (The Moline) and adoptinq a tax increment financinq qlan ther�for. With this motion, TIF District '[-5 will be established. O�er�riew The redevelopment of the site at t�e intersection of Eighth Ave�ue and Excelsior Boulevard, formerly occupied by the Johnson Building, is a priarity for the Gity to achieve the �ision for connecting the Downtown Hvpkins LRT station with Mainstreet. A redevelopment proposal was brougF�t fonNard by Daran Develapment to construct a 241-unit luxury �partment development, including a 189-stall park and rid� and enhanced bicycle facilities. To make the project financially feasible, given the high cost of redevelopmEnt and the unique design of this proje�t, the developer has requested financial assistance in the form of Tax Increment Financing, or TIF. It has been determined that the property qualifies as a TIF Redevelopment District and that the project pro forma warrants the use of TIF. Documentation of thase #indings are included in the Tax Increment Financing Plan attached to this report. If TIF District 1-5 is appro�ed, a deuelopment agreement de�ailing the terms of the financial assistance will be brought forward for consideration. Primary Issues ta Consider • What are th� key findings of the TIF Plan? • Did the Hopkins Planning Commission canf9rm that the redevelapment proposal conforms to the general plans for redevelopmer�t wiihin the Ciiy? Su ortin Information • Resalution 2016-08 • Tax Incrernent,Financin Overview • Ta cre t�in lan fior the establishrnent of TIF District No. 1-5 (The Moline} � ,,. �.. --�° Kersten Ely�rum Director o� Planr�ing & De�eiopment Financial Impact: $_0 Budgeted: Y/N Source: Related Documents (CIP, ERl', etc.): Notes: Council Report 2016-012, Page 2 Analysis of the Issues: • What are the key findings of the TIF Plan? A summary of the basic elements of the TIF Plar� �s incfuded in the supporting �nformation of this repo�t. Findings of the TIF Plan also include the following. • The development, in and of itself, will not necessitate n�w capital inv�stment in police, fire or public infrastructure. • The Hopkir�s SchoaE District and Hennepin County have bee� notified of the possible creation of the TIF District and have not requested additional information or provided any comments. • The purpose of the Drstrict is to preserve and enhanee the tax base, redevelop substandard properties, and provide employment opportunities. • Throu�h interior and exterior inspectian, it was found that the property met all of the qualification requirements of a redevelopment district including coverage, condition of building and distribution of substandard building tests. • Did the Hopkins Planning Commission confirm #hat the redevelopment prv�osal conforms to the genera� plans for redevelopment within the City? The Hopkins Planning Commission considered whether or not the redevelopment proposal conforms to the genera� plans for r�develapment withir� the City and voted unanimously that it did confvrm. Alterna#i�es: The Hopkins City Council has the following alternati�es for this item: • Adopt Resolution 2016-08 as proposed. • Amend Resolution 2016-08 prior ta adaption, provicfed it meets the requirerr�ents of applicable Minnesota Statutes. • Elect not to establish TIF District No. 1-5 at this time. With this action, tlae project will not move forward as planned. CITY OF HOPHINS HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. 2016-08 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO.1; AND ESTABLISffiNG TAX INCREMENT FINANCING DISTRICT NO. 1-5 (THE MOLINE) THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Hopkins, Minnesota (the "City"), as follows: Section 1. Recitals 1.01. The Board of Commissioners of the Hopkins Housing and Redevelopment Authority (the "HRA") has heretofore established Redevelopment Project No. 1 and adopted the Redevelopment Plan therefor. It has been proposed by the HRA and the City that the City adopt a Modification to the Redevelopment Plan for Redevelopment Proj ect No. 1(the "Redevelopment Plan Modification") and establish Tax Increment Financing District No. 1-5 The Moline (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469174 to 4691794, 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 ha�e 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 ihe District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Hennepin County and Independent School District No. 270 ha�ing ta�ng jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission on January 26, 2016, approval of the Plans by the HRA on February 2, 2016, 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, including the redevelopment quali�cations reports and planning documents, include data, information and/or substantiation constituting or relating to the basis for the other �ndings and determinations made in this resolution. The Council hereby confirms, rati�es 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 Redevelopment Project No. 1, but is however, modifying the Redevelopment Plan therefor. Section 2. Findin�s for the Ado�tion and A�roval of ihe Redevelo�ment Plan Modification. 2.01. The Council approves the Redevelopment Plan Modification, and specifically finds that (a) the land within the Project area would not be available for redevelopment without the financial aid to be sought under this Redevelopment Plan; (b) the Redevelopment Plan, as modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Proj ect by private enterprise; and (c) that the Redevelopment Plan, as modified, conforms to the general plan for the development of the City as a whole. Section 3. Findin�s for the Establishment of Tax Increment Financin� District No. 1-5 3.01. The Council hereby finds that the District is in the public interest and is a"redevelopment district" under Minnesota Statutes, Section 469174, Subd. 10(a)(1) of the Act. 3.02. The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TaY Increment Financing Plan, 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 further 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. 3.04. The Hopkins Housing and Redevelopment Authority elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469177, Subd. 3, clause b, which means the �scal disparities contribution would be taken from inside the District. Section 4. Public Pur�ose 4.01. The adoption of the Plans conforms in all respects to the requirements of ihe Act and will help ful�ll a need to develop an area of the City which is already built up, to provide employment opportunities, to improve the t� base and to improve the general economy of the State 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 Ado�tion 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 City Clerk. 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 Hopkins 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 18 months immediately preceding the adoption of this resolution. 5.04. The City Clerk 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 469175, Subd. 4a. Dated: February 2, 2016 Mayor (Seal) ATTEST: City Clerk EXHIBIT A RESOLUTION NO. 2016-08 The reasons and facts supporting the findings for ihe adoption of the Tax Increment Financing Plan (TIF Plan) for Tax Increment Financing District No. 1-5 (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: Finding that Tax Increment Financing District No. 1-5 is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a)(1). The District consists of one parcel, wiih plans to redevelop the area for housing purposes. At least 70 percent of the area of the parcels in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely th�rough private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of ta� increment financing would be less than the increase in the market value estimated to result fi^om the proposed development after subtracting the present value of the projected tax increments for the ma�imum duration of the District permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings, and the need to construct a public parking facility for the future SWLRT line, 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. The increased market value of the site that could reasonably be expected to occur without the use of ta� increment financing would be less than the increase in market value estimated to result fi^om the proposed development after subtracting the present value of the projected tc� increments for the ma�imum duration of the District permitted by the TIF Plan: This �nding is justified on the grounds that the cost of redeveloping the site, cost of public parking facility and required public improvements add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. The City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $33,652,000. c. The present value of taY increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $11,315,549.. d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $22,336,451 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for the District will afford ma�imum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Redevelopment Project No. 1 by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, the redevelopment of a substandard property, increased tax base of the State, increase in availability of safe and decent life-cycle housing and add a high quality development to the City. � — — Tax Increment Financing District Overview City of Hopkins Tax Increment Financing District No. 1-5 — The Moline The following summary contains an overview of the basic elements of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 – The Moline. More detailed information on each of these topics can be found in the complete Tax Increment Financing Plan. Proposed action: ➢ Establishment of Tax Increment Financing District No. 1-5 – The Moline (District) and the adoption of a Tax Increment Financing Plan (TIF Plan). ➢ Modi�cation to the Redevelopment Plan for the Redevelopment Project No. 1 includes the establishment of Tax Increment Financing District No. 1-5 – The Moline, which represents a continuation of the goals and objectives set forth in the Redevelopment Plan for Redevelopment Project No. 1. Type of TIF District: A redevelopment district Parcel Numbers: 24-ll7-22-43-0151 24-117-22-43-0152 24-ll7-22-43-0132 24-117-22-43-0134 City ROW Proposed The District is being created to facilitate the construction of 241 market rate Development: apartments and a 189-stall public parking ramp for the future Southwest Light Rail Transit Stop in the City. Please see Appendix A of the TIF Plan for a more detailed project description. Ma�mum duration: The duration of the District will be 25 years from the date of receipt of the first increment (26 years of increment). The City elects to receive the first tax increment in 2018. It is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after December 31, 2043, or when the TIF Plan is satisfied. Estimated annual tax Up to $1,334,042 increment: �, �°� EHLERS � LEADERS IN PUBLIC FINANCE Authorized uses: The TIF Plan contains a budget that authorizes the m�imum amount that may be expended: Land/Building Acquisition .................... Site Improvements/Preparation ............. Public Utilities ...................................... Other Qualifying Improvements ........... Administrative Costs (up to 10%)......... PROJECT COSTS TOTAL .................. Interest.................................................. PROJECT COSTS TOTAL ............... ...........................$4,000,000 ...........................$2,000,000 ...........................$1,000,000 ........................... $5,541,056 ...........................$2,393,724 .........................$14,934,780 .........................$ll,396,187 ......................... �26�330,967 See Subsection 2-10, on page 2-6 of the TIF Plan for the full budget authorization. Form of �nancing: The project is proposed to be financed by a pay-as-you-go note and possible bond issue. Administrative fee: Up to 10% of annual increment, if costs are justified. Interfund Loan If the City wants to pay for administrative expenditures or capital Requirement expenditures from a tax increment fund, it is recommended that a resolution authorizing a loan from another fund be passed PRIOR to the issuance of the check. 4 Year Activity Rule After four years from the date of certification of the District one of the (� 469.176 Subd. 6) following activities must ha�e been commenced on each parcel in the District • Demolition • Rehabilitation • Renovation • Other site preparation (not including utility services such as sewer and water) If the activity has not been started by appro�mately February 2020, no additional t� increment may be taken from that parcel until the commencement of a qualifying activity. 5 Year Rule Within 5 years of certification revenues derived from tax increments must be (� 469.1763 Subd. 3) expended or obligated to be expended. Any obligations in the District made after appro�mately February 2021, will not be eligible for repayment from tax increments. The reasons and facts supporting the fmdings for the adoption of the TIF Plan for the District, as required pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution. Page 2 EHLERS LEA�ERS IN PUBLIC FINANCE �:6'� . , w�a�T{�.�.ar��,zi� As of.Ianuary 26, 2016 Draft for Public Hearing Modification to the Redevelopment Plan for Redevelopment Project No. 1 and the Tax Increment Financing Plan for the establishment of Tax Increment Financing District No. 1-5 (The Moline) (a redevelopment district) within Redevelopment Project No. 1 Hopkins Housing and Redevelopment Authority City of Hopkins Hennepin County State of Minnesota Public Hearing: February 2, 2016 Adopted: �� 3060 Centre Po nte Dn eb�R sevi�e, MinnesaOCl 51�3�11� 5 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com Table of Contents (for reference purposes only) Section 1- Modification to the Redevelopment Plan for Redevelopment Project No. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1 Foreword............................................................. 1-1 Section 2- Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 Subsection 2-1. Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 Subsection 2-2. Statutory Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 Subsection 2-3. Statement of Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 Subsection 2-4. Redevelopment Plan Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2 Subsection 2-6. Classification of the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2 Subsection 2-7. Duration and First Year of Tax Increment of the District ........... 2-4 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements . . . . . . . . . . . . . . . . 2-4 Subsection 2-9. Sources of Revenue/Bonds to be Issued . . . . . . . . . . . . . . . . . . . . . . 2-5 Subsection 2-10. Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 Subsection 2-11. Fiscal Disparities Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-6 Subsection 2-12. Business Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-7 Subsection 2-13. County Road Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-8 Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions . . . . . . . . . . . . . . . . . 2-8 Subsection 2-15. Supporting Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10 Subsection 2-16. Definition of Tax Increment Revenues . . . . . . . . . . . . . . . . . . . . . . . 2-10 Subsection 2-17. Modifications to the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 Subsection 2-18. Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11 Subsection 2-19. Limitation of Increment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12 Subsection 2-20. Use of Tax Increment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13 Subsection 2-21. Excess Increments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13 Subsection 2-22. Requirements for Agreements with the Developer . . . . . . . . . . . . . . 2-14 Subsection 2-23. Assessment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14 Subsection 2-24. Administration of the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14 Subsection 2-25. Annual Disclosure Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14 Subsection 2-26. Reasonable Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14 Subsection 2-27. Other Limitations on the Use of Tax Increment . . . . . . . . . . . . . . . . . 2-15 Subsection 2-28. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-16 Appendix A Project Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 Appendix B Map(s) of Redevelopment Project No. 1 and the District . . . . . . . . . . . . . . . . . . . . . . . . . B-1 Appendix C Description of Property to be Included in the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1 Appendix D Estimated Cash Flow for the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1 Appendix E Minnesota Business Assistance Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1 Appendix F Redevelopment Qualifications for the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1 Appendix G Findings Including But/For Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1 Section 1- Modification to the Redevelopment Plan for Redevelopment Project No. 1 Foreword The following text represents a Modification to the Redevelopment Plan for Redevelopment Proj ect No. 1. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for Redevelopment Project No. 1. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 1-5 (The Moline). For further information, a review of the Redevelopment Plan for Redevelopment Project No. 1 is recommended. It is available from the City Clerk at the City of Hopkins. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Redevelopment Project No. 1. Hopkins Housing and Redevelopment Authority Modification to the Redevelopment Plan for Redevelopment Project No. 1 1-1 Section 2- Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) Subsection 2-1. Foreword The Hopkins Housing and RedevelopmentAuihority (the "HRA"), the City ofHopkins (the "City"), staffand consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 1-5 (the Moline) (the "District"), a redevelopment tax increment financing district, located in Redevelopment Project No. 1. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S.'), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to 469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in �nancing 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 Redevelopment Project No. 1. Subsection 2-3. Statement of Objectives The District currently consists of four parcels of land and adjacent and internal rights-of-way. The District is being created to facilitate ihe construction of 241 market rate apartments and a 189-stall public parking ramp for the future Southwest Light Rail Transit Stop in the City. Please see Appendix A for further District information. The HRA will be entering into a contract with Doran 810 Apartments LLC and expects development to occur in 2016. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for Redevelopment Project No. 1. The activities contemplated in the Modification to the RedevelopmentPlan and the TIF Plan do notpreclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over ihe life of Redevelopment Project No. 1 and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the HRA or Ciry and is further described in this TIF Plan. 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 ihat it may acquire within the District or may lease land or facilities to a developer. 4. The HRA or City may perform orprovide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 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 identi�ed by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The HRA or City may acquire any parcel within the District including interior and adj acent street rights of way. Any properties identi�ed for acquisition will be acquired by the HRA or City only in order to accomplish one or more ofthe following: storm sewerimprovements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The HRA or City may acquire property by gift, dedication, condemnation or directpurchase from willing sellers in order to achieve the objectives ofthis TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District The HRA and City, in determining the need to create a tax increment �nancing district in accordance with M.S., Sections 469.174 to 469.1794, as amended, inclusive, find that the District, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. 10(a)(1) as defined below: (a) "Redevelopmentdistrict"meansatypeofta�incrementfinancingdistrictconsistingofaproject, or portions of a project, within which the authority finds by resolution that one or more of the following conditions, reasonably disti^ibuted throughout the district, exists: (1) parcels consisting of 70 percent of the area in the district are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than SO percent of the buildings, not including outbuildings, are sti^ucturally substandard to a degree requiring substantial renovation or clearance; (2) The property consists of vacant, unused, underused, inappropriately used, or infi^equently used rail yards, rail storage facilities or excessive or vacated railroad rights-of-way; (3) tankfacilities, orproperty whose immediatelyprevious use was for tankfacilities, as defined in Section II SC, Subd. I5, if the tank facility: (i) have or had a capacity of more than one million gallons; (ii) are located adjacent to rail facilities; or (iii) have been removed, or are unused, underused, inappropriately used or infi^equently used,� or (4) a qual�ing disaster area, as defined in Subd. IOb. (b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in structural elements or a combination of deficiencies in essential utilities andfacilities, light and ventilation, fireprotection includingadequate egress, layoutandcondition ofinteriorpartitions, or similar factors, which defects or deficiencies are of sufficient total significance to just� substantial renovation or clearance. (c) A building is notstructurally substandard if it is in compliance with the building code applicable Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-2 to new buildings or could be modified to satisfy the building code at a cost of less than I S percent of the cost of co�structing a�ew structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electi^ical, or structural repairs or other similar reliable evidence. The municipality may not make such a determination without an interior inspection of th�e property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission fi^om the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard. (d) A parcel is deemed to be occupied by a sti^ucturally substandard building for purposes of the finding under paragraph (a) or by the improvement described in paragraph (e) if all of the following conditions are met: (1) the parcel was occupied by a substandard building or met the requirements of paragraph (e), as the case may be, within three years of the filing of the request for certification of the parcel as part of the district with the county auditor; (2) the substandard building or the improvements described in paragraph (e) were demolished or removed by the authority or the demolition or removal was financed by the authority or was done by a developer under a development agreement with the authority; (3) the authority found by resolution before the demolition or removal that the parcel was occupied by a str ucturally substandard building or met the requirement ofparagraph (e) and that after demolition and clearance the authority intended to include the parcel within a district,� and (4) upon filing the request for certification of the ta� capacity of the parcel as part of a district, the authority notifies the county auditor that the original ta� capacity of the parcel must be adjusted as provided by � 469.177, subdivision 1, paragraph (�. (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures unless I S percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures. (� For districts consisting of two or more noncontiguous areas, each area must qual� as a redevelopment district under paragraph (a) to be included in the disti^ict, and the entire area of the district must satisfy paragraph (a). In meeting the statutory criteria the HRA and City rely on the following facts and �ndings: • The District is a redevelopment district consisting of four parcels. • An inventory shows that parcels consisting of more than 70 percent of the area in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures. • An inspection of the buildings located within the District finds that more than 50 percent of the buildings are structurally substandard as defined in the TIF Act. (See Appendix F). • The City has passed a demolition resolution prior to certification of the District. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-3 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 ofM.S., Sections 273.111, 273.112, or 273.114 or Chapter 473Hfor taxes payable in any of the �ve calendar years before the filing of the request for certi�cation 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 firstyear 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 2018, 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 2043, or when the TIF Plan is satis�ed. 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 Pursuant to M. S., Section 469.174, Subd. 7 and M. S., Section 469.177, Subd. l, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2015 for taxes payable 2016. Pursuant to M. S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2018) the amount by which the original value has increased or decreased as a result of: Change in tax exempt status of property; Reduction or enlargement of the geographic boundaries of the district Change due to adjustments, negotiated or court-ordered abatements; Change in the use of the property and classification; Change in state law governing class rates; or 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 t� rate for taxes payable 2016, assuming the request for certification is made before June 30, 2016. 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 Redevelopment ProjectNo. 1, upon completion of the projects within the District, will annually appro�mate tax increment revenues as shown in ihe 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 2018. The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-4 Project Estimated Tax Capacity upon Completion (PTC) Original Estimated Net Tax Capacity (ONTC) Estimated Captured Tax Capacity (CTC) Original Local Tax Rate Estimated Annual Tax Increment (CTC x Local Tax Rate) $918,569 $31,225 $887,344 1.50341 Pay 2015 $1,334,042 Percent Retained by the HRA 100% TaY capacity includes a 3% inflation factar for the duration of the District. The taY cap acity included in this chart is the estunated taY capacity of the District in year 25. The taY capacity of the District in year one is estimated to be $316,313. Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its request for certi�cation 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 t� capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. The City did issue a demolition permit and pass a demolition resolution prior to certification of the District. 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 taY increments. The HRA or City reserves the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed, the projects within ihe District will be financed by a pay-as-you-go note and possible bond issue. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS Tax Increment Interest TOTAL TOTAL $23,937,243 $2,393,724 $26,330,967 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 ma�mum principal amount of $14,934,780. Such bonds may be in the form of pay-as- you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-5 Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the construction of 241 market rate apartments and a 189-stall public parking ramp for the future Southwest Light Rail Transit Stop. The HRA and City have determined that it will be necessary to provide assistance to the project(s) for certain District costs, as described. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate ofpublic costs and uses of funds associated with the District is outlined in the following table. USES OF TAX INCREMENT FUNDS Land/Building Acquisition Site Improvements/Preparation Utilities Other Qualifying Improvements Administrative Costs (� to 10%� PROJECT COST TOTAL Interest PROJECT AND INTEREST COSTS TOTAL TOTAL $4,000,000 $2,000,000 $1,000,000 $5,541,056 $2,393,724 $14,934,780 $ll,396,187 $26,330,967 The total project cost, including �nancing costs (interest) listed in the table above does not exceed the total projected tax increments for the District as shown in Subsection 2-9. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M. S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of RedevelopmentProjectNo. 1, (including administrative costs, which are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan. Subsection 2-11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the HRA or City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M. S., Section 469.177, Subd. 3, clause b, (within the District) are followed, the following method of computation shall apply: (1) The original net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal disparity commercial-industrial net ta� 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 th�e original net tax capacity is equal to or greater than the current net ta� capacity, there is no captured ta� capacity and no ta� increment determination. Where the original tax capacity is less than the current ta� Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-6 capacity, the difference between the original net ta� capacity and the current net ta� capacity is the captured net tax capacity. This amount less any portion thereof which th�e authority has designated, in its tax increment financing plan, to share with the local ta�ing districts is the retained captured net ta� capacity of the authority. (2) The county auditor shall exclude the retained captured net ta� capacity of the authority fi^om the net tax capacity of th�e local taxing disti^icts in determining local taxing district tax rates. Th�e local ta� rates so determined are to be extended against the retained captured net ta� capacity of the authority as well as the net ta� capacity of the local ta�ing disti^icts. The tax generated by the extension of the less of (A) the local ta�ing district ta� rates or (B) the original local ta� rate to the retained captured net ta� capacity of the authority is the ta� increment of the authority. The HRA will choose to calculate fiscal disparities by clause b. It is not anticipated that the District will contain commerciaUindustrial property. 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 ta� 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 fi^om the method of computation in paragraph (a) to th�e 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, siae, 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 ofrenovating 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 bene�t of an organization described in section 501 (c) (3) of the Internal Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-7 Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $150,000 or less; (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100. The HRA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2-13. County Road Costs Pursuant to M.S., Section 469.175, Subd. 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 �ve 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 ihe 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 counry roads, even after the public hearing. Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the HRA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other ta�ng jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-8 Hennepin County City of Hopkins Hopkins ISD No. 270 Hennepin County City of Hopkins Hopkins ISD No. 270 Other Total IMPACT ON TAX BASE 2015/Pay 2016 Total Net Tax Capacity 1,467,566,893 16,210,817 103,765,150 Estimated Captured Tax Capacity (CTC) Unon Completion 887,344 887,344 887,344 IMPACT ON TAX RATES Pay 2015 Extension Rates 0.463980 0.625030 0.303400 0.111000 1.503410 Percent of Total 30.86% 41.57% 20.18% 7.38% 100.00% Percent of CTC to Entit,� 0.0605% 5.4738% 0.8551 % Potential CTC Taxes 887,344 411,710 887,344 554,617 887,344 269,220 887,344 98,495 1,334,042 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2015 rate. The total net capacity for the entities listed above are based on actual Pay 2016 �gures. The District will be certified under the actual Pay 2016 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 ihe District is $23,937,243; (2) Probable im�act of the District on cit�provided services and ability to issue debt. An impact of the District on police protection is not expected. The Hopkins police department does track all calls for service including property-type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment. The probable impact of the District on fire protection is not expected to be signi�cant. Typically new buildings generate few calls, if any, and are of superior construction. The existing building, which will be eliminated by the new development, has public safety concerns. 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 developmentplans, there are no additional costs associated with streetmaintenance, sweeping, plowing, lighting and sidewalks. The developmentin the District is expected to contribute an estimated $2,485 per unit in sanitary sewer (SAC) connection fees. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-9 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. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is $4,830,536; (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taYing jurisdictions remained the same, is $7,387,033; (5) Additional information requested bv 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 �nancing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2-15. Supporting Documentation Pursuant to M.S. Section 469.175, Subd. 1(a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd. 3, clause (b)(2) and the �ndings 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: Downtown Hopkins Station: Southwest Corridor Investment Framework - Transitional Station Area Action Plan. 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: Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed underM. S., Section 469.177; The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by ihe authority with tax increments; Principal and interest received on loans or other advances made by the authority with tax increments; Interest or other investment earnings on or from tax increments; 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 The market value homestead credit paid to the Authority under M.S., Section 273.1384. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-10 Subsection 2-17. Modifications to the District In accordance withM.S., Section 469.175, Subd. 4, any: 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); Increase in amount of bonded indebtedness to be incurred; A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; Increase in the portion of the captured net tax capacity to be retained by the HRA or City; Increase in the estimate of the cost of the District, including administrative expenses, thatwill be paid or financed with tax increment from the District or Designation of additional property to be acquired by the HRA or City, shall be approved upon the notice and after the discussion, public hearing and �ndings 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 redevelopment district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2)(A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, ihe original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The HRA or City must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2-18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the HRA or City, other than: 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 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 Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-11 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 certi�cation 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 of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment �nancing information and the cost of examining and auditing authorities' use of tax increment �nancing. 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 fi^om the date of certification of the original net ta� capacity of the ta� incrementfinancingdistrictpursuanttoM.S., Section469.177, nodemolition, 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 ta� incrementfinancing disti^ict by the authority or by the owner oftheparcel in accordance with the tcr� incrementfinancing plan, no additional tax increment may be taken fi^om that parcel, and the original net ta� capacity of that parcel shall be excluded fi^om the original net ta� capacity of the ta� increment financing disti^ict. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or oth�er site preparation on thatparcel including qualified improvement of a sti^eet adjacent to that parcel, in accordance with the ta� incrementfinancing plan, the authority shall cert� to the county auditor that the activity has commenced and the county auditor shall cert� the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity ofthe ta� incrementfinancing district. The county auditor must enforce th�e 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 Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-12 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 reconsti^uction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by appro�mately February 2020 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: To pay the principal of and interest on bonds issued to finance a project To finance, or otherwise pay public redevelopment costs of the Redevelopment Project No. 1 pursuant to M.S., Sections 469.001 to 469.047; To pay for project costs as identified in the budget set forth in the TIF Plan; To �nance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 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 Redevelopment Project No. 1 by a developer; 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/orM.S., Sections 469.178; and 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/orM.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. T� increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for HRA or City administration (up to 10 percent) and for the costs of public improvement activities outside the District. Subsection 2-21. Excess Increments Excess increments, as defined in M. S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective ta�ng 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 Redevelopment Project No. 1 or the Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-13 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 developmentwith City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. S, no more than 25 percent, by acreage, of the property to be acquired in ihe District as set forth in the TIF Plan shall at any time be owned by ihe HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to M. S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the HRA or City concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the HRA or Ciry should the development or redevelopment 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 speci�cations 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 City Clerk. 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 Of�ce 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. S and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and thatthe increased marketvalue ofthe site thatcould reasonably be expected Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-14 to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for ihe ma�mum duration of the Districtpermitted by the TIF Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness ofthe feasibility of developing the project site(s) within the District. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-27. Other Limitations on the Use of Tax Increment 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 Redevelopment Project No. 1 pursuant to M.S., Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Poolin� Limitations. At least 75 percent of tax increments from the District must be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of the District. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 75 percent test set forth in paragraph (2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certi�cation of the District, 75 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5. 4. Redevelo�ment District. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to �nance the cost of correcting conditions that allow designation ofredevelopment and renewal and renovation districts underM. S., Section 469.176 Subd. 4j. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements orhazardous substances, pollution, or contaminants, acquiring adjacentparcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of haaardous substances or remediation necessary for development of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the HRA or City, including the cost ofpreparation of the development action response plan, may be included in the qualifying costs. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-15 Subsection 2-28. Summary The Hopkins Housing and Redevelopment Authority is establishing the District to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113, telephone (651) 697-8500. Hopkins Housing and Redevelopment Authority Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 (The Moline) 2-16 Appendix A Project Description Doran 810 Apartments LLC is proposing to construct a 5-story, 241-unit market rate apartment with underground parking and an attached 189-stall public parking facility for the future Southwest Light Rail Transit Stop (SWLRT) in the City. The building will consist of ll9 one-bedrooms, 103 two-bedrooms, 13 three-bedrooms and six one-level, walk-up units. It is anticipated that after the building and parking are constructed, that the 189-stall public parking facility will be sold to Metro Transit for use by riders utilizing the new SWLRT stop to be located at Excelsior Boulevard and 8`'' Avenues. Appendix A-1 Appendix B Map(s) of Redevelopment Project No. 1 and the District Appendix B-1 Tax Increment Financing District No. 1-5 Redevelopment Project No. 1 +� � ,.:�y � � II , 4i Y: �; ��1 �� "` , s"� ri - T� � = �� 54T�ut Tax Increment Financing District No. 1-5 Redevelopment Project No. 1 City of Hopkins Hennepin County, Minnesota � O Z — � o � U t Z L N t � m � V L � C � � � Y � d � � O A ,ao_, � n a V 2 � � C � `~ � � m � � V O � } � � � � C V m I m � C U � m i � U = C x O � � � I I nbva sino� •.�.s � � � x 1 I �I V�NO.L8NN1W i •w.� LL J L UI N �� Z � I � I�L O I U � 7S �plM411 I 1111 �t 'L i01 —�— --� �u � � ; � .� 1 ppp �i 1 � � � --- i i . ' "�i � i .. i � w _ I � I L___ 1 M a I � •^ �O I---^'- � � � � Q ��f i � � o ' r � 0 � Z � �__1 � � O ��, � Z Z � 4 Ul i ad �� 0 nbva s�no� :�.s z �► } -----------� ' V O �, � Z O � L � } a i U � t •L t � Q � Z � � � � a�ni� � � �. �� ' � � �ii ++w �+am V > ro�u r�rtio� 0 '�p C � � a x � � � AT� r } � L � t z ^ai 1 �� m t� i E i m ! I � V W '� �"a' i C � "" � � u� � X a v �•�.. Q � � i a � MM � � • z�. vNiaa O �`'" s•w� anr II �-��i@ w � 6 � � "v � " � . �.� � d � � � ,� � .,��„ ,� o .�� ... ]r •� ,ea aq r S ,yy � � � U �' ^ '� S'7N my ��Q �� pp ~� � � M� �1~� ♦' j �� wf O � .� M . � j . �� N ► I I '°� � t �Q �' � � �'� C�� $ z � �� r�� 'S ; �a � � 3 MII �.i �N # wc� �� N 1 N E . � � � � �t $ � � Z � n Q w►1 �n S7N wp +' ut � �� g, •+ 's'SM M4 w� 1 ! �� a --w„ -- M� lI � _ _ _ _ _ _ _ _ _ _ _ _ �� \ P �. N _, s. QQ� ---- s.. �-- � •L. o�_ � �-• �---- � V�INOJ.BNNIW Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights-of-way and abutting roadways identi�ed by the parcels listed below. Parcel Numbers Address Owner 24-117-22-43-0151 810 ls` ST. S DORAN 24-117-22-43-0152 810 ls` ST. S DORAN 24-117-22-43-0132 810 ls` ST. S DORAN 24-117-22-43-0134 810 ls` ST. 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� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � O CO � V N I� V I� � I� CO � CO N N CO N N CO V � V � � O CO � CO N M N � CO � I� V CO I� � O � CO V � � V O CO N � M CO M � M O N O M N I� � CO O � M CO � M � O V � N I� N � V � CO V M N N N M � � V � V O I� � N M V CO I� � O N V � I� � M � I� � M CO � O M CO � N V V V V V V � � � � � � CO CO CO CO CO I� I� I� I� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N M M M M M M M M M M M M M M M M M M M M M M M M M M M � V CO � I� N � N V N CO V I� I� I� CO I� � V � I� M � I� � V CO V N � � O CO � O O N � � CO M N M CO M � V M I� � � � I� V � N � N � � O � N M CO � � � CO � � M � M � � N � I� � V M M V � CO � N CO O � � � CO I� � O N M � I� � O N V CO � O N V CO � V CO � M V V V V � � � � � � CO CO CO CO CO I� I� I� I� I� � � � � � 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O � � � � � � � � � � � � � � � � � � � � � � � � � � i � � �u�r � rS n � � C i lf1 e � C N e I � e � N IX f� C � rS n ' M e N e � v n I f0 C � t � O � � u � N u � O C N e v a a C a � C G V G � Y C C C M C � C LL G � C G V G � � O F Appendix E Minnesota Business Assistance Form (Minnesota Department of Employment and Economic Development) A Minnesota Business Assistance Form (MBAF) should be used to report and/or update each calendar year's activity by April 1 of the following year. Please see the Minnesota Department of Employment and Economic Development (DEED) website at htt�://www.deed.state.mn.us/Community/subsidies/MBAFForm.htm for information and forms. Appendix E-1 Appendix F Redevelopment Qualifications for the District Appendix F-1 Report of Inspection Procedures and Results for Determining Qualifcations of a Tax Increment Financing District as a Redevelopment District Johnson Building TIF District 1-5 Hopkins, Minnesota f--_ August 28, 2015 Prepared For the City of Hopkins Prepared by: LHB, Inc. 701 Washington Avenue NoYth, Suite 200 Minneapolis, Minnesota 55401 LHB Project No. 150472 _ TABLE OF CONTENTS PART 1— EXECUTIVE SUMMARY ................................................................................ 2 Purpose of Evaluation ................................................................................2 Scopeof Work ........................................................................................... 3 Conclusion................................................................................................. 3 PART 2— MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS....... 3 A. Coverage Test ...................................................................................... 4 B. Condition of Buildings Test ................................................................... 4 C. Distribution of Substandard Buildings ................................................... 5 PART 3— PROCEDURES FOLLOWED ......................................................................... 6 PART 4 — FINDINGS ...................................................................................................... 6 A. Coverage Test ...................................................................................... 6 B. Condition of Building Test ..................................................................... 7 1. Building Inspection ....................................................................7 2. Replacement Cost ..................................................................... 8 3. Code Deficiencies ..................................................................... 8 4. System Condition Deficiencies ..................................................9 C. Distribution of Substandard Structures ................................................. 9 PART 5- TEAM CREDENTIALS .................................................................................. 11 APPENDIX A Property Condition Assessment Summary Sheet APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs PART 1 - EXECUTIVE SUMMARY PURPOSE OF EVALUATION LHB was hired byr the Cityr of Hopkins to inspect and evaluate the pYopeYries within a Tax IncYement Financing Redevelopment District ("TIF District") pYoposed to be established by the Cityr. The pYoposed TIF District is bound by 1 s` Street South, 8`h Avenue South, Excelsior BoulevaYd and 9`h Avenue South (DiagYam 1). The purpose of LHB's woYk is to deteYmine whetheY the proposed TIF District meets the statutoryr Yequirements foY coveYage, and whether one building on fouY (1) paYcels and one (1) right of wayr paYcel, located within the pYoposed TIF District, meet the qualificarions Yequired for a Redevelopment District. !�'` =��" � .__: . ._ � �� ".;- _�� ., �J 5 � • }�' ~' _ `��- �� `y �'1 ;�1�•�-- '�. s ` .1 . �Y _ ; � .---r �_ ' � � : � i . i �� --�� ---- , � � ! a -.�_s_ �-� �=_�, _ � , _ �n. . ,;-� - r, - _ ,: �� . �, . . . ._ _ �,: ,� +�, . ."� �> � � ? '�; J �f� �'I ?^T �� " �,�,,,�xi �.,�,�, �1 ��'ti^ :. -. � `��I ' ti: � i �.� �_ �_.� , � .� ��.�=- � ��! l.�l {._,, � � � � �, � �� ---- �— '� � � � : ) ' � ''`-< f!� . ;�- . ., -.:a -- ,� � �: .:: a �-�:-� � . . : '_' _ —_ �` _ . �, � �� r._:_ . s . '�':�. � - . , ,� .. � " � . " � � �'i . Y .{ , � - . yJ� ..`.] I . �r�, . - , . � rF- �tl� �� ;1Fi � f ,:� � �� .' . � _ ._ ._ _. . ' _� � { .� , �..� �� '� r ... � =� � � � � � ��I �' .._'a'�'" �� ` A � �' ..ws/i�'r� i�.- ,�."� Diagram 1— Proposed TIF District SCOPE OF WORK The pYoposed TIF District consists of fouY (4) paYcels and one (1) right of wayr parcel with one (1) building. The building was inspected on August 17, 2015. A Building Code and Condirion Deficiency Report foY the building that was inspected is located in Appendix B. CONCLUSION AfteY inspecring and evaluaring the pYopeYries within the proposed TIF District and applyring curYent statutoryr criteria for a Redevelopment District under Minyaesota Statutes, Section 469. 974, Sul�division 90, it is our pYofessional opinion that the pYoposed TIF District qualifies as a Redevelopment District because: • The pYoposed TIF District has a coveYage calcularion of 100 peYcent which is above the 70 percent YequiYement. • 100 peYcent of the buildings aYe structurally substandaYd which is above the 50 percent Yequirement. • The substandaYd buildings are Yeasonablyr distributed. The Yemainder of this Yeport describes our pYocess and findings in detail. PART 2- MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS The properries were inspected in accordance with the following requirements under Minnesota Statutes, Section 469. 974, Sul�division 90�c�, which states: INTERIOR INSPECTION "The municipalit�r mayr not make such deteYminarion [that the building is structurally substandard] without an interioY inspection of the propertyr..." EXTERIOR INSPECTION AND OTHER MEANS "An interior inspecrion of the propertyT is not required, if the municipality finds that (1) the municipalityr or authority is unable to gain access to the pYopeYtyr afteY using its best efforts to obtain peYmission from the paYtyr that owns oY controls the pYopeYtyr; and (2) the evidence othenvise supports a Yeasonable conclusion that the building is structurally substandaYd." DOCUMENTATION "Written documentation of the findings and reasons why an interioY inspecrion was not conducted must be made and Yetained under secrion 469.175, subdivision 3(1)." QUALIFICATION REQUIREMENTS Minnesota Statutes, Section 469. 974, Su�division 90 (a� (9) Yequires three tests foY occupied parcels: A. COVERAGE TEST ..."paYcels consisring of 70 peYcent of the area of the district are occupied by buildings, streets, utiliries, oY paved oY gYavel paYking lots. .." The coveYage required byr the paYcel to be considered occupied is deftned under Minnesota Statutes, Section 469.974, Sul�division 90(e�, which states: "FoY purposes of this subdivision, a parcel is not occupied byr buildings, streets, uriliries, paved oY gYavel paYking lots, or other similar structuYes unless 15 peYcent of the aYea of the parcel contains buildings, streets, uriliries, paved or gYavel paYking lots, or otheY similaY structuYes." B. CONDITION OF BUILDINGS TEST Minnesota Statutes, Section 469.974, Sul�division 90(a� states, "...and more than 50 percent of the buildings, not including outbuildings, are structuYally substandaYd to a degYee Yequiring substantial Yenovation oY cleaYance;" 1. Structurally substandaYd is deftned under Minnesota Statutes, Section 469.974, Su�division 90(b�, which states: "FoY purposes of this subdivision, `structurallyr substandaYd' shall mean containing defects in structuYal elements or a combinarion of deficiencies in essenrial utiliries and faciliries, light and ventilarion, fire pYotecrion including adequate egYess, layrout and condirion of interioY paYtirions, oY similaY factoYs, which defects oY deficiencies aYe of sufficient total significance to jusrifyr substantial renovarion oY cleaYance." a. We do not count energy code deficiencies to�uard the thresholds required by Minnesota Statutes, Section 469.974, Sul�division 90(b� defined as "structurallyr substandaYd", due to conceYns expYessed byr the State of Minnesota Court of Appeals in the 1�alse�•Auto Sales, Inc. vs. City of l�ichfield case filed NovembeY 13, 2001. 2. Buildings aYe not eligible to be considered structurally substandaYd unless theyr meet certain additional criteria, as set forth in Subdivision 10(c) which states: "A building is not structurallyT substandard if it is in compliance with the building code applicable to new buildings or could be modified to sarisfy the building code at a cost of less than 15 percent of the cost of construcring a new structure of the same square footage and type on the site. The municipalityr may find that a building is not disqualified as structurallyr substandard undeY the pYeceding sentence on the basis of Yeasonablyr available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, oY structural Yepairs, oY other similaY Yeliable evidence." "Items of evidence that suppoYt such a conclusion [that the building is not disqualified] include Yecent fire or police inspections, on-site pYopertyr tax appYaisals oY housing inspecrions, exterior evidence of deteriorarion, or other similar reliable evidence." LHB counts energyr code deficiencies towaYd the 15 percent code thYeshold YequiYed byr Minnesota Statutes, Sectioya 469.974, Sul�division 90(c)) foY the following reasons: • The Minnesota eneYgy code is one of ten building code aYeas highlighted by the l��innesota Department of LaboY and Industryr website where minimum construcrion standaYds are Yequired b�r law. • ChapteY 13 of the 2015 Minnesota Building Code states, "Buildings shall be designed and constructed in accordance with the Inte�national Eneagy Conse�vation Code." FurtheYmoYe, Minnesota Rules, ChapteY 1305.0021 SubpaYt 9 states, "References to the InteT�cational Ene�gy ConseTvation Code in this code mean the Minnesota EneTgy Code. . ." • The Senior Building Code RepYesentarive for the Construcrion Codes and Licensing Division of the Minnesota Department of Labor and IndustryT confirmed that the iVlinnesota Energ�T Code is being enforced throughout the State of Minnesota. • In a Januaryr 2002 YepoYt to the Minnesota Legislature, the Management Anal�rsis Division of the Minnesota Department of Adrninistrarion confirmed that the construcrion cost of new buildings complyring with the Minnesota EneYgy Code is higheY than buildings built prioY to the enactment of the code. • PYopeY TIF analysis YequiYes a comparison between the Yeplacement value of a new building built under current code standards tivith the Yepairs that would be necessary to bring the exisring building up to current code standards. In order foY an equal comparison to be made, all applicable code chapteYs should be applied to both scenarios. Since current construcrion esrimaring softwaYe automatically applies the construcrion cost of complyring with the Minnesota EneYgy Code, energyr code deficiencies should also be idenrified in the e�sring structuYes. C. DISTRIBUTION OF SUBSTANDARD BUILDINGS Minnesota Statutes, Section 469.974, Subdivision 90, defines a Redevelopment District and requires one or more of the following conditions, "reasonably distributed throughout the district." (1) "Parcels consisting of 70 peYcent of the aYea of the district aYe occupied by buildings, streets, utiliries, paved oY gYavel paYking lots, oY other similaY structuYes and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degYee Yequiring substanrial renovarion or cleaYance; (2) the propert�T consists of vacant, unused, underused, inappropriatelyT used, or infrequentlyT used Yail yraYds, Yail stoYage facilities, oY excessive oY vacated Yailroad rights-of-way; (3) tank faciliries, oY propertyr whose immediately previous use was foY tank faciliries. .." OuY inteYpretarion of the distribution YequiYement is that the substandard buildings must be Yeasonably distributed throughout the district as compared to the locarion of all buildings in the district. FoY example, if all of the buildings in a district aYe located on one half of the aYea of the district, with the otheY half occupied by parking lots (meering the YequiYed 70 peYcent coverage foY the district), we would evaluate the distribution of the substandaYd buildings compared with only the half of the district where the buildings aYe located. If all of the buildings in a district aYe located evenly thYoughout the enriYe aYea of the district, the substandaYd buildings must be Yeasonably distributed thYoughout the enrire aYea of the district. We believe this is consistent with the opinion expressed byr the State of Minnesota CouYt of Appeals in the 1�alse�•Auto Sales, Inc. vs. City of Bichfield case filed November 13, 2001. PART 3 - PROCEDURES FOLLOWED LHB inspected the Johnson Building at 810 1 s` Street South in Hopkins, l��innesota during the dayr of August 17, 2015. PART 4 - FINDINGS A. COVERAGE TEST 1. The total squaYe foot aYea of the paYcel in the pYoposed TIF District was obtained fYom City YecoYds, GIS mapping and site verificarion. 2. The total square foot aYea of buildings and site impYovements on the parcels in the proposed TIF District was obtained fYom Cityr records, GIS mapping and site verificarion. 3. The peYcentage of coverage foY each paYcel in the pYoposed TIF District was computed to determine if the 15 percent minimum Yequirement was met The total squaYe footage of paYcels meering the 15 peYcent YequiYement was divided into the total squaYe footage of the entire district to deteYmine if the 70 peYcent YequiYement was met. FINDING: The pYoposed TIF District met the coveYage test undeY Minnesota Statutes, Section 469. 974, Subdivision 10(e�, which Yesulted in parcels consisring of 100 peYcent of the aYea of the pYoposed TIF District being occupied by buildings, streets, utiliries, paved or gravel parking lots, or other similar structures (DiagYam 2). This exceeds the 70 peYcent aYea coveYage Yequirement foY the pYoposed TIF District undeY Minnesota Statutes, Section 469. 974, Subdivision �a� �9�. � � � ,�.. -�� . , F,�� '� � �, � dc 1� + � 3 . . +^ .�.a M° � �.�L. ---�i� �i � � ; � �-'�4 � "�� •'�---�� ``�-� � :T. V - � { � �� ` �'- , - � j ! ' r`` . —..dt,. ! � � — � _ _ � i ��` i�----- ------ r,- 3-,.._�f -�--- ��_ _ r ._,� . ��._ Y�' � ��, ..:�I}� � � s`� � �� 7' � . . .. =.,_t„� � ' ,§ �i ' y' i � .. �—�—� , y J � T �� T f I �, . , - �'�{ '�k�!,.� ,.�,� ,. � _ " � q� � -- -� � - -: �. � � i �:'I —S. �'_-f_ __ . .I *� :�.�._. � rl � I�.. _. _ '' .. ♦ � , _ t� ---- _. - .- ',� g � � , ' _� '- lA� �.�. - --- _. � �" ,,:} f �,,; .�-, � - - � �� . , r .�►� . � „ �_ � � � -�� _ - � �,' _. -��.",, _ _ �; - � �:: ,. . � ,�:�1"r . �- .� ? �- � � , Y'`�' � �M - •. .�1 ��L F �. ��. � _ _� � � � � � - -� .._ _ � �:�.�-�--- � ; �"�� G � � _,, _� _-- . :� :k " �• � , :� � � _ �E � ..:.�_..i� . . "°:�- �.'�. _.�.�.-F.=. �r _. Diagram 2 - Coverage Diagram Shaded area depicts a parcel more than 1� percent occupied b� buildings, streets, utiliries, paved or gravel parking lots or other similar structures B. CONDITION OF BUILDING TEST 1. BUILDING INSPECTION The first step in the evaluarion pYocess is the building inspecrion. After an inirial walk- thru, the inspectoY makes a judgment whetheY oY not a building "appeaYs" to have enough defects or deficiencies of sufficient total significance to jusrify substanrial Yenovarion oY cleaYance. If it does, the inspectoY documents �uith notes and photogYaphs code and non- code deficiencies in the building. 2. REPLACEMENT COST The second step in evaluaring a building to determine if it is substandaYd to a degree reqiliring substanrial renovation or cleaYance is to deteYmine its Yeplacement cost This is the cost of construcring a new structuYe of the same square footage and tyrpe on site. Replacement costs were Yesearched using R.S. Means Cost WoYks sc�uaYe foot models for 2015. A replacement cost was calculated by first establishing building use (office, retail, Yesidenrial, etc.), building construcrion type (wood, concrete, masonryr, etc.), and building size to obtain the appYopriate median Yeplacement cost, which factoYs in the costs of construcrion in Hopkins, Minnesota. Replacement cost includes laboY, materials, and the contractoY's oveYhead and profit. Replacement costs do not include aYchitectuYal fees, legal fees oY otheY "soft" costs not diYectly Yelated to construcrion acriviries. Replacement cost foY each building is tabulated in Appendix A. 3. CODE DEFICIENCIES The next step in evaluaring a building is to deteYmine what code deficiencies e�st with Yespect to such building. Code deficiencies are those condirions foY a building which aYe not in compliance with current building codes applicable to new buildings in the State of l��innesota. Minnesota Statutes, Section 469.974, Subdivision 90(c�, specificallyr pYovides that a building cannot be consideYed structuYalltir substandaYd if its code deficiencies aYe not at least 15 percent of the replacement cost of the building. As a Yesult, it was necessar�r to deteYmine the extent of code deficiencies for each building in the pYoposed TIF District. The evaluarion was made by reviewing all available infoYmation with respect to such buildings contained in Cityr Building Inspecrion Yecords and making interioY and exterior inspecrions of the buildings. LHB utilizes the curYent Minnesota State Building Code as the official code for ouY evaluarions. The Minnesota State Building Code is actuallyr a series of provisional codes written specifically for l��innesota on1yT requirements, adoprion of several inteYnarional codes, and amendments to the adopted international codes. AfteY idenrifying the code deficiencies in each building, we used R.S. Means Cost WoYks 2015; Unit and Assemblv Costs to deteYmine the cost of corYecting the idenrified deficiencies. We were then able to compare the corYection costs with the Yeplacement cost of each building to deteYmine if the costs for corYecting code deficiencies meet the Yequired 15 percent threshold. FINDING: One (1) building (100 peYcent) in the pYoposed TIF District contained code deficiencies exceeding the 15 percent threshold required byr Minnesota Statutes, Section 469.974, Su�division 90(c�. The Building Code, Condition Deficienc�r and Context Analysis Report for the building in the pYoposed TIF District can be found in Appendix B of this YepoYt. 4. SYSTEM CONDITION DEFICIENCIES If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c�, then in oYder foY such building to be "stYucturallyr substandard" undeY Minnesota Statutes, Section 469.974, Subdivision 90(1��, the building's defects oY deficiencies should be of sufficient total significance to jusrifyr "substanrial renovation oY clearance." Based on this definirion, LHB re-evaluated each of the buildings that met the code deficiencyr threshold under Minnesota Statutes, Section 469.974, Sul�division 90(c�, to deteYmine if the total deficiencies warYanted "substanrial Yenovarion oY cleaYance" based on the criteria we out]ined above. Svstem condirion deficiencies are a measurement of defects oY substanrial deterioYation in site elements, structuYe, exterioY envelope, mechanical and electrical components, fire protection and emergencyT syTstems, interior partitions, ceilings, floors and doors. The evaluarion of system condirion deficiencies was made by Yeviewing all available infoYmarion contained in City Yecords, and making interior and exterior inspecrions of the buildings. LHB only idenrified system condirion deficiencies that were visible upon our inspecrion of the building or contained in Cityr YecoYds. We did not consideY the amount of "service life" used up foY a paYriculaY component unless it was an obvious part of that component's deficiencies. After idenrifying the system condition deficiencies in each building, ��e used our professional judgment to deteYmine if the list of defects oY deficiencies is of sufficient total significance to jusrifyr "substanrial renovarion or cleaYance." FINDING: In our pYofessional opinion, one building (100 percent) in the pYoposed TIF District aYe structurally substandaYd to a degYee Yequiring substantial Yenovarion or clearance, because of defects in structuYal elements oY a combinarion of deficiencies in essenrial utiliries and facilities, light and ventilarion, fire protecrion including adequate egress, layout and condirion of interior partitions, or similar factors `vhich defects or deficiencies are of sufficient total significance to jusrify substanrial renovarion or cleaYance. This exceeds the 50 peYcent Yequirement of Subdivision 10a(1). C. DISTRIBUTION OF SUBSTANDARD STRUCTURES Much of this report has focused on the condirion of individual buildings as they relate to Yequirements idenrified byr Minnesota Statutes, Section 469.174, Sul�division 90. It is also important to look at the distriburion of substandaYd buildings thYoughout the geogYaphic aYea of the pYoposed TIF District (Diagram 3). FINDING: The paYcels with substandaYd buildings aYe Yeasonablyr distributed compaYed to all paYcels that contain buildings. � ' - ,+ ! � �� 11 w ��_ \ ;dC � � �3 ya , . =��,�_'- � ' ° � �' , . `---� . �+� "F�-- � _ . „��_,� � � � ��: __7'�3—.1 't�" w` � . J ,,;--.=. � , { , , , , - r - �� 7� , � � `� � 1�� ,. i _, � i �.r�d .- �--- ar an —� � _�%� �'� ,n � , � ,. ��a� � '� .:.� ! � � - - .. ... � '�" r d�;' ' — _. �r .. r � � �- �a°'. .,��_ __ ' t�' I � "� ��l � � � *iT Y � - � $3 � ` + � _'_ � �'��e �. .— � , , �� ,, -�1� .�^ J . p J�� . __"_" __ - bf - ' . ¢' r {�T� � " �1� .-� -- -- - _. '� r y �? f _,. � � , � J', r . - r� ..�' � • — ��,, , , �_. - - ,.�.J� . l r� �� t_, # -. ~,, ( - . � � 4� � � - - + - . - . _ .� `R` � �..�r � � I j� r � t!" �I� �', �?,. — .�uv � I. L-.: j: � .�Q�,1 y �_J Y ' _. � . . '`�� y ��Y y � _� i I � q � ` � �; - ly.,�, �' � '' - /" ` � � ,� r " i � 1-i", �J ''►/''� .�f � ''`v - .�'� ..- �'= �--� ti � � - T , ` • ;,�,, �: �. ' � ' - •. �- � _ �';� " r ��: _ `� I - "'_ . ... . �r � �� . .� 4N„n, .� • , . •-- . - . . -....� • . .. � .._ . � ��: ! : � _ J �_ .. + �f .� � �Y � �� ` , � _ �,x� �G°�} � ,Try _. . �� _ ' _ r + � .' .. ._'.. b ."` - aM - / � , i ?'�f�� "�'� . I�E�'. '",i' " `�' ,�- > - - _ � � . �: � ��- ;� . a ;5�� _ _� �; , .— . _, o— __ . - - �r a_ �� r L�^ _ ' .. . �� ' �:A l• N �h _ ! J f �" - ' __ .�,�"c,.- ',.��/ . I`� ' O '_� - �"`-'^". %� 7'✓� . ,��. y J ��gy(� -:. .� _ V' � `'��(�� .. �. �i\'F.bM�V- `�F ._+' '� � �' 1`� �'w .�� J r ; ! J w � . "5.'� �: ` ,'�, ` _ - � � . �� :� �?_ _._...- - .nr. _. Diagram 3 - Substandard Buildings Shaded green area depicts pascels with substandard buildings. Shaded orange area depicts substandard buildings. PART 5 - TEAM CREDENTIALS Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst Michael has 28 �reaYs of experience as project principal, pYoject manager, pYoject designer and pYoject architect on planning, urban design, educarional, commeYcial and goveYnmental projects. He has become an expeYt on Tax Increment Finance District anal�rsis assisring over 100 ciries with strategic planning foY TIF Districts. He is a SenioY Vice PYesident at LHB and curYentlyr leads the l��inneapolis office. Michael completed a t�uo-yreaY Bush Fello�uship, stud�ring at MIT and Harvard in 1999, eaYning MasteYs degYees in Cityr Planning and Real Estate Development fYom MIT. He has served on moYe than 50 committees, boards and communityr task foYces, including a term as a Cityr Council PYesident and as Chair of a Metropolitan Planning Organizarion. Most Yecentlyr, he served as Chair of the Edina, Minnesota planning commission. Michael has also managed and designed several award- winning architectural pYojects, and was one of four architects in the Countryr to Yeceive the AIA Young AYchitects Citation in 1997. Philip Waugh — Project Manager/TIF Analyst Philip is a project manageY with 13 years of experience in historic preseYvation, building invesrigarions, material YeseaYch, and construcrion methods. He pYeviouslyr woYked as a historic pYeservationist and also served as the pYeservarion specialist at the St. Paul Heritage PYeservation Commission. CurYently, Phil sits on the BoaYd of Directors foY the Preser�rarion Alliance of Minnesota. His curYent Yesponsibilities include pYoject management of historic preservarion pYojects, perfoYming building condirion surveyrs and analyrsis, TIF analysis, writing pYeservarion specifications, historic design reviews, writing Historic Preservarion Tax CYedit applications, pYeservarion planning, and gYant wriring. Phil Fisher — Inspector For 35 yTears, Phil Fisher worked in the field of Building Operarions in l��innesota including White BeaY Lake Area Schools. At the UniveYsinr of l��innesota he eaYned his BacheloY of Science in Industrial Technology. He is a CeYrified PlayrgYound Safet�r InspectoY, Certified Plant EngineeY, and is trained in Minnesota Enterprise Real Properries (MERP) Facility Condirion Assessment (FCA). His FCA training was Yecentlyr applied to the Minnesota DepaYtment of Natural Resources Faciliries Condirion Assessment project involving over 2,000 buildings. M:\15Pfoj\150472\400 Design\406 Reports\Final Repoft\150472 20150825 TTF 1-5 Johnson Building Redevelopment Final Repoftdocx APPENDICES APPENDIX A Property Condition Assessment Summary Sheet APPENDIX B Building Code and Condition Deficiencies Reports APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs APPENDIX A Propertyr Condirion Assessment Summaryr Sheet �I�I�I�I I� 0 0 0 0 � o � o � o = o w � y Q 7 N � � _ N O � y � il N .�. N a � U �A C OI N C U 'a N 7 � Q � O � O � U � C i N � � a 0 0 N � N ro r V 0 m rn v O � ri co r N O C N � 0 0 0 ° o � r m o � co m o m � � a � � � � � � rn m N > O U m 0 � ro ro rn � � � N u� r � r I m I� I r I N I� 0 0 0 0 � .� .� .� � � � � � w w w w � `o_ `o_ `o_ `o_ W � .� .� .� � � � � � � > > > > > a O O O O O C � � � � � � — — — — U m � N � � � � � � a � � � � � � a Q z � U O O O O U O ro ro ro ro 0 � � Q N � uV N N � � m m u� a O O O O m m m m � 0 v v v v N N N N O � N N N N C � � � � � a v v v v � N N N N 9 � N J � a � am�oWo �; � Z `o � � A a u� '-' N o � :. v �+ o 0 � LL F � Q � � a Z m � =o o a � m o = APPENDIX B Building Code, Condition DeficiencyT and Context Analysis Reports Johnson Building TIF District 1-5 Building Code, Condition Deficiency and Context Analysis Report August 17, 2015 Map No. & Address: Inspection Date(s) & Time(s) Inspection Type: Summary of Deficiencies: Estimated Replacement Cost: Parcels A-D - 810 1st Stseet South, Hopkins, MN 55343 August 5, 2015, 9:30 am Interior and Exterior It is our professional opinion that this building is Substandard because: - Substantial renovation is required to correct Conditions found. - Builcling Code deficiencies total more than 15% of replacement cost, NOT including energy code deficiencies. Estimated Cost to Correct Building Code Deficiencies: Percentage of Replacement Cost for Building Code Deficiencies: Defects in Structural Elements $6,941,404 �1,421,659 20.48% 1. Structural block work has both vertical and horizontal cracking indicative of differential settlement. 2. Block parapet walls have deteriorated beyond their life expectancy. 3. Steel columns are rusting. 4. Steel lintels are rusting. Combination of Deficiencies Essential Utilities and Facilities a. All 19 restrooms are non-compliant with accessibility codes. b. There is not a compliant accessible route into or out of the building. c. The showers are non-compliant with accessibility codes. d. Staff break room sinks do not meet ADA requi�ements. e. 10 inch kick plates are requi�ed per code on all exterior glass doors. 2. Light and Ventilation a. The original ventilation system is not code compliant. b. There is non-compliant exposed wiring in several areas. Fire Protection/Adequate Egress a. 95% of interior door hardware is non-compliant. b. There are five offices that do not have code compliant side access to egYess doors. c. Railings are needed on both sides of the stairs in the eastern most office suite to meet code compliance. d. Exterior door thresholds are higher than code allows. e. Code compliant anunciator panel is missing. Layout and Condition of Interior Partitions/Materials a. Ceiling exhibits signs of cracking dry��all. b. Ceiling tile is stained from water intrusion. c. The stair railing does not meet current codes for spacing between rail openings. d. The interior walls requi�e hole repair and new paint. e. Interior walls require dr��all replacement in some areas. £ Rubber wall base requi�es replacement in some areas. g. Wood door threshold requires replacement. h. Ships ladder to roof does not meet correct angle for code compliance. 5. Exterior Construction a. Greater than 75% of the exterior block walls need to be re-pointed to prevent water intrusion. b. Greater than 10% of the exterior CMU needs to be replaced to prevent water intrusion. c. Exterior walls should be painted/sealed to prevent water intrusion. d. Exterior steps have deteriorated and are a potential hazard. e. Exterior windows have seals that have failed and are allowing water intrusion. £ The roof appears to have failed as evident by the number of stained ceiling tile, the stained pooling on the roof and reports by tenants. g. All caulk joints have failed allowing water intrusion. Description of Code Deficiencies 1. Point CMU's to prevent water intrusion per code. 2. Replace damaged and or missing CMU's to prevent water intrusion per code. 3. Remove and replace all caulking at control joints to prevent water intrusion per code. 4. Remove and replace all caulking around exterior door and window openings to prevent water intrusion per code. 5. Paint/seal exterior CMU's to prevent water intrusion per code. 6. Remove and replace roof to prevent water intrusion per code. 7. Correct spacing on interior stair railing to meet code. 8. Repair concrete steps to prevent injury per code. 9. Remove and replace original HVAC system to comply with code. 10. Repaint/protect steel structural columns per code. 11. Repaint/protect steel lintels per code. 12. Remode119 restrooms to comply with Accessibility code. 13. Replace hardware on 100 interior doors for code compliance. 14. Install accessible door opener on garage door to main building interior for ADA compliance. 15. Install an accessible route for ADA egess compliance. 16. Correct two of the three exterior door thresholds for ADA compliance. 17. Install 10 inch kick plates on exterior glass doors for code compliance. 18. Enclose wiring where exposed per code. 19. Make showers ADA compliant. 20. Remodel five offices to comply with side access to egress doors for ADA compliance. Overview of Deficiencies This building constructed in 1974 is in need of repair/replacement in several critical building components. The roof is past its anticipated life expectancy as noted by the number of roof leaks reported by tenants. A visual inspection of the roof shows rusting on the metal flashing, cracking of the built up membrane and signs of ponding water in numerous areas. The exterior block walls show significant signs of deterioration. The mortar joints are in need of re-pointing to prevent water intrusion. Window seals have failed and are allowing water intrusion. There is no means of building access or egYess to meet ADA compliance. There are no ADA compliant restrooms in the building. The HVAC system is original and does not meet current code requirements. APPENDIX C Building Replacement Cost Reports Code Deficiencyr Cost RepoYts Photographs Johnson Building TIF District 1-5 Replacement Cost Report Square Foot Cost Estimate Report Estimate Name: Hopkins Johnson Building City of Hopkins 801 1 st Street South , Hopkins , Minnesota , 55343 Building Type: Warehouse with Concrete Block / Steel Frame Location: MINNEAPOLIS, MN Story Count: 1 Story Height (L.F.): 24 FloorArea (S.F.): 70000 Labor Type: OPN Basement Included: Yes Data Release: Year 2014 Quarter 3 Cost Per Square Foot: $99.19 Building Cost: $6,941,404.35 A1010 A1030 A2010 A2020 � B1010 B1020 B2010 Standard Foundations Date: ,� -� _.. S. ._ .. . ,.., , z_ _ .. r � " _... . • :� , 4 �.� e . y'��i �.'' "? , f . � --- � . k'� '..�� F�,�,�� '��'ja.':Yy+�y+`. �•f n+' S I� .{ � • T� .1 �'r '.�� .� � _ -� '�_� - - - �- _ --. �a��_...... _--_ Costs are derived from a building model with basic components. 8/7/2015 Scope differences and market conditions can cause costs to vary significantly. ��rea entered is outside the range recommended by RSMea��=. % of Total Cost Per S.F. Cost � �� Rfl'+$a}$ i9� � i�l 2.26 158,218.85 Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6 KSF, 12" deep x 24" wide Spread footings, 3000 PSI concrete, load 100K, soil bearing capacity 6 KSF, 4' - 6" square x 15" deep Slab on Grade Slab on grade, 4" thick, non industrial, reinforced Basement Excavation Excavate and fill, 10,000 SF, 8' deep, sand, gravel, or common earth, on site storage Basement Walls Foundation wall, CIP, 12' wall height, pumped, .444 CY/LF, 21.59 PLF, 12" thick � Floor Construction Cast-in-place concrete column, 12" square, tied, 200K load, 12' story height, 142 Ibs/LF, 4000PS1 Flat slab, concrete, with drop panels, 6" slab/2.5" panel, 12" column, 15'x15' bay, 75 PSF superimposed load, 153 PSF total load Floor, concrete, slab form, open web bar joist @ 2' OC, on W beam and column, 25'x25' bay, 32" deep, 125 PSF superimposed load, 170 PSF total Roof Construction Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay, 20" deep, 40 PSF superimposed load, 60 PSF total load Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay, 20" deep, 40 PSF superimposed load, 60 PSF total load, add for column Exterior Walls Johnson Building TIF District 1-5 LHB Project No. 150472 Page 1 of 3 0.57 39,633.55 1.69 118,585.30 5.45 381,737.30 5.45 381,737.30 4.18 292,319.30 4.18 292,319.30 3.52 246,599.00 3.52 246,599.00 � 19.86 1,390,335.99 4.05 283,806.44 13.67 957,026.70 2.14 149,502.85 10.37 726,124.00 8.58 600,474.70 1.79 125,649.30 4.43 309,764.45 Replacement Cost Report Parcels A-D Concrete block (CMU) wall, regular weight, 75% solid, 8 x 8 x 16, 4500 PSI, reinforced, vertical #5@32", grouted B2030 Exterior poors Door, aluminum & glass, with transom, narrow stile, double door, hardware, 6'- 0" x 10'-0" opening Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0" x 7'-0" opening Door, steel 24 gauge, overhead, sectional, electric operator, 12'-0" x 12'-0" opening B3010 Roof Coverings Roofing, asphalt flood coat, gravel, base sheet, 3 plies 15# asphalt felt, mopped Insulation, rigid, roof deck, composite with 2" EPS, 1" perlite Roof edges, aluminum, duranodic, .050" thick, 6" face Gravel stop, aluminum, extruded, 4", mill finish, .050" thick B3020 Roof Openings Roof hatch, with curb, 1" fiberglass insulation, 2'-6" x 3'-0", galvanized steel, 165 Ibs Smoke hatch, unlabeled, galvanized, 2'-6" x 3', not incl hand winch operator . � C1010 Partitions Concrete block (CMU) partition, light weight, hollow, 6" thick, no finish C1020 Interior poors Door, single leaf, kd steel frame, hollow metal, commercial quality, flush, 3'-0" x 7'-0" x 1-3/8" C2010 Stair Construction Stairs, steel, grate type w/nosing & rails, 20 risers, with landing C3010 Wall Finishes 2 coats paint on masonry with block filler Painting, masonry or concrete, latex, brushwork, primer & 2 coats Painting, masonry or concrete, latex, brushwork, addition for block filler C3020 Floor Finishes Concrete topping, hardeners, metallic additive, minimum Concrete topping, hardeners, metallic additive, maximum Vinyl, composition tile, maximum C3030 Ceiling Finishes Acoustic ceilings, 3/4"mineral fiber, 12" x 12" tile, concealed 2" bar & channel grid, suspended support � � D2010 Plumbing Fixtures Water closet, vitreous china, bowl only with flush valve, wall hung Urinal, vitreous china, wall hung Lavatory w/trim, wall hung, PE on CI, 18" x 15" Service sink w/trim, PE on Cl,wall hung w/rim guard, 24" x 20" Water cooler, electric, wall hung, wheelchair type, 7.5 GPH D2020 Domestic Water Distribution Gas fired water heater, commercial, 100< F rise, 75.5 MBH input, 63 GPH D2040 Rain Water Drainage Roof drain, steel galv sch 40 grooved, 5" diam piping, 10' high 4.43 309,764.45 1.2 83,981.29 0.2 13,970.00 0.26 18,305.79 0.74 51,705.50 5.81 406,769.89 3.2 224,286.30 2.05 143,402.70 0.39 27,480.25 0.17 11,600.64 0.15 10,275.62 0.01 960.29 0.13 9,315.33 0.8 0.8 0.23 0.23 0.41 0.41 1.74 1.17 0.32 0.25 2.09 0.55 1.19 0.35 0.72 0.72 1.46 0.46 0.16 0.49 0.23 0.11 0.41 0.41 1.69 0.98 56,085.46 56,085.46 16,146.90 16,146.90 28,369.80 28,369.80 121,614.60 81,553.32 22,262.02 17,799.26 146,148.87 38,382.12 83,044.71 24,722.04 50,693.58 50,693.58 101,902.56 32,274.59 11, 080.54 34,322.59 16,334.70 7,890.14 28,455.59 28,455.59 118,228.99 68,649.75 Johnson Building TIF District 1-5 Replacement Cost Report LHB Project No. 150472 Page 2 of 3 Parcels A-D Roof drain, steel galv sch 40 threaded, 5" diam piping, for each additional foot add D3020 Heat Generating Systems Warehouse ventilization with heat system 24,000 CFM Supply and Exhaust D3050 Terminal & Package Units Rooftop, single zone, air conditioner, offices, 3,000 SF, 9.50 ton D4010 Sprinklers Wet pipe sprinkler systems, grooved steel, black, sch 40 pipe, ordinary hazard, 1 floor, 10,000 SF D4020 Standpipes Wet standpipe risers, class III, steel, black, sch 40, 6" diam pipe, 1 floor Wet standpipe risers, class III, steel, black, sch 40, 6" diam pipe, additional D5010 Electrical Service/Distribution D5020 D5030 Overhead service installation, includes breakers, metering, 20' conduit & wire, 3 phase, 4 wire, 120/208 V, 200 A Feeder installation 600 V, including RGS conduit and XHHW wire, 200 A Switchgear installation, incl switchboard, panels & circuit breaker, 120/208 V, 1 phase, 400 A Lighting and Branch Wiring Receptacles incl plate, box, conduit, wire, 5 per 1000 SF, .6 watts per SF Wall switches, 1.0 per 1000 SF Miscellaneous power, to .5 watts Central air conditioning power, 3 watts Fluorescent fixtures recess mounted in ceiling, 0.8 watt per SF, 20 FC, 5 fixtures @32 watt per 1000 SF Fluorescent fixtures recess mounted in ceiling, 2.4 watt per SF, 60 FC, 15 fixtures @ 32 watt per 1000 SF Communications and Security Communication and alarm systems, fire detection, addressable, 100 detectors, includes outlets, boxes, conduit and wire Fire alarm command center, addressable without voice, excl. wire & conduit � � E1030 Vehicular Equipment Architectural equipment, dock boards, heavy duty, 5' x 5', aluminum, 5000 Ib capacity Architectural equipment, dock levelers, hydraulic, 7' x 8', 10 ton capacity E1090 Other Equipment �- . . � : . . - . � SubTotal Contractor Fees (General Conditions,Overhead,Profit) Architectural Fees User Fees 100% 10.00% 0.00% 0.00% 0.71 5.17 5.17 0.92 0.92 3.81 49,579.24 361,791.11 361,791.11 64,255.59 64,255.59 266,859.60 3.81 266,859.60 2.13 148,829.86 0.46 32,007.77 1.67 116,822.09 0.23 16,380.90 0.05 3,182.05 0.03 2,362.50 0.15 5.8 2.39 0.14 0.14 0.04 10,836.35 405,777.26 167,578.60 9,767.80 9,767.80 2,920.26 2.31 162,047.34 0.77 53,695.46 2.65 185,433.73 2.45 171,363.52 0.2 14,070.21 � � 2.68 187,267.50 0.32 22,400.00 2.36 164,867.50 0 0 $90.17 $9.02 $0.00 $0.00 $6,310,367.59 $631,036.76 $0.00 $0.00 Johnson Building TIF District 1-5 Replacement Cost Report LHB Project No. 150472 Page 3 of 3 Parcels A-D Johnson Building TIF District 1-5 Code Deficiency Cost Report Parcels A-D - 810 1st Street South, Hopkins, MN 55343 Parcel Numbers: 241 1 7224301 51, 2411722430134, 2411722430132, 2411722430152 Accessibility Items Entrance/Egress Modify main entrance for ADA compliance Install accessible ramp Install exterior door assist system Modify elevator to open into lobby Modify garage level entrance for ADA compliance Install exterior door assist system Restrooms Modify 19 restrooms for ADA compliance Door hardware Install ADA compliant door hardware Showers Modify showers for ADA compliance Staff break rooms Modify sink area in staff break rooms for ADA compliance E�erior doors Modify three exterior thresholds to meet code compliance Structural Elements $ 10,000.00 lump $ 3,500.00 Ea $ 30,000.00 lump $ 3,500.00 Ea $ 5,000.00 Ea $ 250.00 Ea $ 5,000.00 Ea $ 1,000.00 Ea $ 250.00 Ea Columns Repaint all steel columns to prevent rust $ 5,000.00 lump Lintels Repaint all steel lintels to prevent rust $ 2,500.00 lump Windows Remove and replace window caulking to prevent water intrusio $ 2.06 LF Exiting Exterior glass doors Install code required 10" kick plates on all glass doors Hand rails Modify horizontal metal stair railings for code compliance Install code required hand railings in eastern most suite Interior office hallways Modify interior office hallways for exiting code compliance Ships ladder Install code compliant ships ladder to roof Fire Protection Annunciator panel Install code compliant annunciator panel $ 100.00 Ea $ 5,000.00 lump $ 250.00 Ea $ 5,000.00 Ea $ 3,500.00 Ea $ 5,000.00 ea 1 $ 10,000.00 1 $ 3,500.00 1 $ 30,000.00 1 $ 3,500.00 19 $ 95,000.00 100 $ 25,000.00 2 $ 10,000.00 5 $ 5,000.00 3 $ 750.00 5,000.00 2,500.00 1,384.32 10 $ 1,000.00 1 $ 5,000.00 2 $ 500.00 5 $ 25,000.00 1 $ 3,500.00 1 $ 5,000.00 Johnson Building TIF District 1-5 Code Deficiency Cost Report LHB Project No.150472 Page 1 of 2 Parcels A-D Exterior Construction E�erior walls Tuck point exterior CMU's Replace damaged CMU's Remove and replace all exterior control joint caulking to prevent water intrusion Paint exterior to prevent water intrusion E�erior steps Repair/Replace exterior steps to prevent injury Roof Construction $ 1.75 SF $ 8.00 Ea $ 2.06 LF $ 1.74 SF $ 3,500.00 Lump 66,500 $ 1,000 $ 2,500 $ 70,000 $ 1 $ Replace roof Remove existing roofing $ 0.91 SF 70,000 $ Install new roof to prevent water intrusion $ 5.81 SF 70,000 $ SF 720 $ Mechanical- Electrical Ventilation Replace original HVAC system with code compliant system $ 6.09 SF 70,000 $ Electrical Enclose exposed wiring per code $ 3,500.00 Lump 1 $ Upgrade electrical service for new HVAC system $ 0.50 SF 70,000 $ 116,375.00 8,000.00 5,150.00 121,800.00 3,500.00 63,700.00 406,700.00 426,300.00 3,500.00 35,000.00 Total Code Improvements $ 1,421,659.32 Johnson Building TIF District 1-5 Code Deficiency Cost Report LHB Project No.150472 Page 2 of 2 Parcels A-D Johnson Building TIF District 1-5 Photos: Parcels A-D, 810 1st Street South, Hopkins, MN 55343 , �� - � -�- - �---� - � / � --- 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P1050139.JPG ��.. � P1050429.JPG P1050426.JPG �� P1050431.JPG Johnson Building TIF District 1-5 Page 14 of 14 Photos LHB Project No. 150472 ParcelsA-D Appendix G Findings Including But/For Qualifications The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for Tax Increment Financing District No. 1-5 (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: L Finding that Ta� Increment Financing District No. 1-5 is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a)(1). The District consists of one parcel, with plans to redevelop the area for housing purposes. At least 70 percent of the area of the parcels in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investmentwithin the reasonably foreseeable future and that the increased market value of the site th�at could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result fi^om the proposed development after subti^acting the present value of the projected ta� increments for the ma�imum duration of the District permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investmentwithin the reasonablyforeseeable future: This finding is supported by the fact that the redevelopment proposed in the TIF Plan meets the City's obj ectives for redevelopment. Due to the high cost ofredevelopment on the parcels currently occupied by substandard buildings, and the need to consturct a public parking facility for the future SWLRT line, 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. The increased market value of the site that could reasonably be expected to occur without the use of ta� incrementfinancing would be less than the increase in market value estimated to resultfi^om the proposed developmentafter subtracting the present value ofthe projected ta� increments for the mcr�imum duration of the District permitted by the TIF Plan: This finding is justified on the grounds that the cost of redeveloping the site, cost of public parking facility and required public improvements add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopmentinfeasible withouttax increment assistance. The City reasonably determines thatno other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $33,652,000. The present value of tax increments from the District for the ma�mum duration of the district permitted by the TIF Plan is estimated to be $11,315,549. Appendix G-1 3 Even if some development other than the proposed development were to occur, the Council finds thatno alternative would occurthatwouldproduce amarketvalue increase greaterthan $22,336,451 (the amount in clause b less the amount in clause c) without tax increment assistance. Finding that the TIF Plan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. FindingthattheTlFPlanfortheDistrictwillaffordmaximumopportunity,consistentwiththesound needs of the City as a whole, for the development or redevelopment of Redevelopment Project No. 1 by private enterprise. The proj ect to be assisted by the District will result in increased employment in the City and the State of Minnesota, the redevelopment of a substandard property, increased tax base of the State, increase in availability of safe and decent life-cycle housing and add a high quality development to the City. But-For Analysis Current Market Value New Market Value - Estimate Difference Present Value of Tax Increment Difference Value Likely to Occur Without TIF is Less Than: 2,498,000 36,150,000 33,652,000 11,315,549 22,336,451 22,336,451 Appendix G-2