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V.1. Establish Tax Increment Financing District No. 1-6; ElverumAugust 17, 2021 Council Report 2021-077 ESTABLISH TAX INCREMENT FINANCING DISTRICT NO. 1-6 Proposed Action Staff recommends adoption of the following motion: Following the public hearing, move to approve: Resolution 2021-045 Adopting a Modification to the Development Program for Redevelopment Project No. 1 and Establishing Tax Increment Financing District No. 1-6 (325 Blake) and Adopting a Tax Increment Financing Plan; and Resolution 2021-046 Authorizing an Interfund Loan for Advance of Certain Costs in Connection with Tax Increment Financing District No. 1-6 (325 Blake). Overview 325 Blake Road, owned by the Minnehaha Creek Watershed District (MCWD), is a 17-acre site purchased for the purpose of regional stormwater treatment, bank stabilization and public use. MCWD, in partnership with the City of Hopkins, is interested in selling a portion of the site not needed for these activities to a private developer. Alatus has been selected as the preferred developer and a development plan is currently being considered. In preparation for the creation of a tax increment financing district to facilitate redevelopment, a blight analysis was completed on the building occupying the site and the City approved a demolition resolution preserving the ability to create a redevelopment TIF district under State Statute. The City is approaching the end of the three-year period allowed from time of demolition of the qualifying building to the establishment of the TIF District, and therefor is recommending that the district be established to further preserve the ability to provide financial assistance for redevelopment activities. The creation of the district does not obligate the City to provide TIF, rather it preserves the right to do so in the future. Primary Issues to Consider The attached memorandum from Stacie Kvilvang, Ehlers Public Financial Advisors, provides more clarification on the process and purpose of the district’s creation. Supporting Information • Memo from Stacie Kvilvang, Ehlers • Modification to the Development Program and TIF Plan for 1-6 • Resolution 2021-045 • Resolution 2021-046 ___________________________ Kersten Elverum Director of Planning & Development Financial Impact: $__0__________Budgeted: Y/N ____ Source: ________________ Related Documents (CIP, ERP, etc.): _______________________________________ MEMORANDUM TO: Kersten Elverum – Director of Planning and Development FROM: Stacie Kvilvang - Ehlers DATE: August 17, 2021 SUBJECT: Public Hearing on TIF District 1-6 (325 Blake) Overview The City and HRA are considering the establishment of Tax Increment Financing District 1-6 (325 Blake), a redevelopment district (District) to facilitate construction of approximately 600 apartments, 125 senior cooperative units, 50 town homes and 23,500 sq/ft of commercial space and finance infrastructure/public improvements. In addition, the City and HRA anticipate utilizing up to 35 percent of the tax increment (including any administrative costs) for affordable housing objectives. They may decide to utilize a portion of the tax increment and return a portion to the County on an annual basis or they may take all of the tax increment in one year to assist eligible projects. The District will encompass 1 parcel located at 325 Blake Road. Please reference the map in Appendix A of the TIF Plan for further information on the location of the District. Term Length The duration of this District will be 25 years from the date of receipt of the first increment, which is anticipated in 2024. Thus, it is estimated that the District, would terminate at the earlier of satisfaction of outstanding obligations such as pay-as-you-got notes, interfund loans and bonds or on December 31, 2049. Qualification Criteria In order to establish a redevelopment district, a City must determine that (i) parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii) more than 50 percent of the buildings are structurally substandard. The City hired LHB to complete a coverage test and blight analysis in 2017. Based upon their inspection, the parcel was considered to be 100% covered and it was determined that the building was structurally substandard. Because the property owner wanted to remove the building prior to a developer being selected and to allow planned improvements to Blake Road, the City approved a demo resolution on July 17, 2018 as required to preserve the right to include the parcel in a future TIF district. Please reference Appendix D of the TIF Plan for further information about meeting the establishment criteria. Budget The budget below is in a maximum amount, meaning over the term of the District, the amount of tax increment collected may not exceed what is noted for Project Costs ($86,478,951). If that were to happen, the City and HRA would be required to modify the budget which would entail going through the entire notification and public hearing process again as if the City and HRA were establishing a new district. Please note: the budget does not resemble the amount of assistance being provided to the developer for development of the site. Assistance for each project is negotiated on its own merits and part of a separate Contract for Private Redevelopment between the HRA and the developer. Administrative Costs and Affordable Housing Dollars The HRA may retain 10 percent of tax increment generated for ongoing administrative costs associated with the District OR for other eligible redevelopment activities within the District or City. Based upon the proposed development projects noted above, it is estimated that this will equal approximately $357,000/year once fully developed. In addition, the HRAA has elected to retain an additional 10 percent of tax increment generated for affordable housing to increase available pooling to 25%. Over the term of the District, this may provide up to $900,000/year after the obligations are paid off to assist other affordable housing initiatives and/ or projects within the City. Interfund Loan The City and/or HRA may have some out-of-pocket expenses prior to TIF being received in the District. State Statute requires the City/HRA to approve an interfund loan for any of these expenses prior to realizing the cost (or within 60 days of the expenditure). We have provided the City with the approval resolution for an amount up to $100,000, which advances would be repaid at 4% interest (statutory maximum interest rate) when TIF is available. Please contact me at 651-697-8506 with any questions. USES Land/Building Acquisition 11,250,000$ Site Improvements/ Preparation 15,000,000 Affordable Housing 22,028,190 Utilities 3,000,000 Other Qualifying Improvements 26,389,484 Administrative Costs (up to 10%)8,811,276 PROJECT COSTS TOTAL 86,478,951$ Interest 10,445,087 PROJECT AND INTEREST COSTS TOTAL 96,924,038$ 1 1 2 2 2 2 3 3 4 4 5 6 7 9 9 11 12 13 14 15 18 88,112,762$ 8,811,276 96,924,038$ 11,250,000$ 15,000,000 22,028,190 3,000,000 26,389,484 8,811,276 86,478,951$ 10,445,087 96,924,038$ 2,080,642,179 2,533,771 0.1218% 23,376,940 2,533,771 10.8388% 137,105,821 2,533,771 1.8480% 38.2100% 26.99% 2,533,771 $ 968,154 67.6640% 47.79% 2,533,771 1,714,451 26.4780% 18.70% 2,533,771 670,892 9.2350%6.52% 2,533,771 233,994 141.5870% 100.00% $3,587,491 §¨¦7 £¤169 City of Hopkins Tax Increment Financing District 1-6 325 Blake Road North TIF District No. 1-6 Redevelopment Project No. 1 8/11/2021 DistrictType:Redevelopment District Name/Number:1-6 (325 Blake) County District #:Exempt Class Rate (Exempt)0.00% First Year Construction or Inflation on Value 2022 Commercial Industrial Preferred Class Rate (C/I Pref.) Existing District - Specify No. Years Remaining First $150,000 1.50% Inflation Rate - Every Year:0.00%Over $150,000 2.00% Interest Rate:1.00%Commercial Industrial Class Rate (C/I)2.00% Present Value Date:1-Aug-23 Rental Housing Class Rate (Rental)1.25% First Period Ending 1-Feb-24 Affordable Rental Housing Class Rate (Aff. Rental) Tax Year District was Certified:Pay 2021 First $100,000 0.75% Cashflow Assumes First Tax Increment For Development:2024 Over $100,000 0.25% Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit) Assumes Last Year of Tax Increment 2049 First $500,000 1.00% Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,000 1.25% Incremental or Total Fiscal Disparities Incremental Homestead Residential Class Rate (Hmstd. Res.) Fiscal Disparities Contribution Ratio 32.7850%Pay 2021 First $500,000 1.00% Fiscal Disparities Metro-Wide Tax Rate 139.5040%Pay 2021 Over $500,000 1.25% Maximum/Frozen Local Tax Rate: 141.587%Pay 2021 Agricultural Non-Homestead 1.00% Current Local Tax Rate: (Use lesser of Current or Max.)141.587%Pay 2021 State-wide Tax Rate (Comm./Ind. only used for total taxes)35.9780%Pay 2021 Market Value Tax Rate (Used for total taxes)0.14358%Pay 2021 Building Total Percentage Tax Year Property Current Class After Land Market Market Of Value Used Original Original Tax Original After Conversion Map ID PID Owner Address Market Value Value Value for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap. 1 1911721140002 MCWD 325 Blake Rd 11,625,000 11,625,000 100%11,625,000 Pay 2021 Exempt - Rental 145,313 1 11,625,000 0 11,625,000 11,625,000 0 145,313 1. Base values are based upon $15,000/unit 2. Located in SD # 270 and WS #3 Tax Rates Area/ Phase 8/11/2021 Estimated Taxable Total Taxable Property Percentage Percentage Percentage Percentage First Year Market Value Market Value Total Market Tax Project Project Tax Completed Completed Completed Completed Full Taxes Area/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./Units Value Class Tax Capacity Capacity/Unit 2022 2023 2024 2025 Payable 1 Sr. Coop 332,330 325,000 125 40,624,963 Hmstd. Res.406,250 3,250 25%75%100%100%2026 1 Apts 270,000 270,000 219 59,130,000 Rental 739,125 3,375 25%75%100%100%2026 1 Retail 175 175 6,000 1,050,000 C/I Pref.20,250 3 25%75%100%100%2026 1 Apts 270,000 270,000 191 51,570,000 Rental 644,625 3,375 25%75%100%100%2026 1 TH 400,000 398,760 9 3,588,840 Hmstd. Res.35,888 3,988 50%100%100%100%2025 2 Apts 270,000 270,000 76 20,520,000 Rental 256,500 3,375 0%25%75%100%2027 2 Apts 270,000 270,000 79 21,330,000 Rental 266,625 3,375 0%25%75%100%2027 2 Retail 175 175 8,000 1,400,000 C/I Pref.27,250 3 0%25%75%100%2027 2 TH 400,000 398,760 5 1,993,800 Hmstd. Res.19,938 3,988 0%50%100%100%2026 2 Apts 270,000 270,000 36 9,720,000 Rental 121,500 3,375 0%25%75%100%2027 2 Retail 175 175 7,500 1,312,500 C/I Pref.25,500 3 0%25%75%100%2027 2 TH 400,000 398,760 35 13,956,600 Hmstd. Res.139,566 3,988 0%50%100%100%2026 TOTAL 226,196,703 2,703,017 Subtotal Residential 775 222,434,203 2,630,017 Subtotal Commercial/Ind.21,500 3,762,500 73,000 Total Fiscal Local Local Fiscal State-wide Market Tax Disparities Tax Property Disparities Property Value Total Taxes Per New Use Capacity Tax Capacity Capacity Taxes Taxes Taxes Taxes Taxes Sq. Ft./Unit Sr. Coop 406,250 0 406,250 575,197 0 0 58,329 633,526 5,068.21 Apts 739,125 0 739,125 1,046,505 0 0 84,899 1,131,404 5,166.23 Retail 20,250 6,639 13,611 19,271 9,262 6,746 1,508 36,787 6.13 Apts 644,625 0 644,625 912,705 0 0 74,044 986,749 5,166.23 TH 35,888 0 35,888 50,813 0 0 5,153 55,966 6,218.46 Apts 256,500 0 256,500 363,171 0 0 29,463 392,633 5,166.23 Apts 266,625 0 266,625 377,506 0 0 30,626 408,132 5,166.23 Retail 27,250 8,934 18,316 25,933 12,463 9,264 2,010 49,671 6.21 TH 19,938 0 19,938 28,230 0 0 2,863 31,092 6,218.46 Apts 121,500 0 121,500 172,028 0 0 13,956 185,984 5,166.23 Retail 25,500 8,360 17,140 24,268 11,663 8,635 1,884 46,450 6.19 TH 139,566 0 139,566 197,607 0 0 20,039 217,646 6,218.46 TOTAL 2,703,017 23,933 2,679,084 3,793,235 33,388 24,645 324,773 4,176,040 Total Property Taxes 4,176,040 Current Market Value - Est.11,625,000 less State-wide Taxes (24,645)New Market Value - Est.226,196,703 less Fiscal Disp. Adj.(33,388) Difference 214,571,703 less Market Value Taxes (324,773)Present Value of Tax Increment 76,783,530 less Base Value Taxes (205,744) Difference 137,788,172 Annual Gross TIF 3,587,491 Value likely to occur without Tax Increment is less than:137,788,172 8/11/2021 Tax Increment Cashflow - Page 3 Project Original Fiscal Captured Local Annual Semi-Annual State Admin.Semi-Annual Semi-Annual PERIOD % of Tax Tax Disparities Tax Tax Gross Tax Gross Tax Auditor at Net Tax Present ENDING Tax Payment OTC Capacity Capacity Incremental Capacity Rate Increment Increment 0.36%10%Increment Value Yrs.Year Date - - - - 02/01/24 100%470,507 (145,313) (1,660) 323,534 141.587%458,083 229,041 (825) (22,822) 205,395 203,356 0.5 2024 08/01/24 100%470,507 (145,313) (1,660) 323,534 141.587%458,083 229,041 (825) (22,822) 205,395 405,701 1 2024 02/01/25 100%1,647,671 (145,313) (9,303) 1,493,056 141.587%2,113,973 1,056,987 (3,805) (105,318) 947,863 1,334,842 1.5 2025 08/01/25 100%1,647,671 (145,313) (9,303) 1,493,056 141.587%2,113,973 1,056,987 (3,805) (105,318) 947,863 2,259,360 2 2025 02/01/26 100%2,528,673 (145,313) (19,610) 2,363,751 141.587%3,346,764 1,673,382 (6,024) (166,736) 1,500,622 3,715,741 2.5 2026 08/01/26 100%2,528,673 (145,313) (19,610) 2,363,751 141.587%3,346,764 1,673,382 (6,024) (166,736) 1,500,622 5,164,876 3 2026 02/01/27 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 6,710,517 3.5 2027 08/01/27 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 8,248,468 4 2027 02/01/28 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 9,778,768 4.5 2028 08/01/28 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 11,301,454 5 2028 02/01/29 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 12,816,564 5.5 2029 08/01/29 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 14,324,137 6 2029 02/01/30 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 15,824,209 6.5 2030 08/01/30 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 17,316,818 7 2030 02/01/31 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 18,802,002 7.5 2031 08/01/31 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 20,279,796 8 2031 02/01/32 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 21,750,238 8.5 2032 08/01/32 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 23,213,365 9 2032 02/01/33 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 24,669,212 9.5 2033 08/01/33 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 26,117,816 10 2033 02/01/34 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 27,559,214 10.5 2034 08/01/34 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 28,993,440 11 2034 02/01/35 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 30,420,530 11.5 2035 08/01/35 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 31,840,521 12 2035 02/01/36 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 33,253,447 12.5 2036 08/01/36 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 34,659,344 13 2036 02/01/37 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 36,058,246 13.5 2037 08/01/37 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 37,450,188 14 2037 02/01/38 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 38,835,206 14.5 2038 08/01/38 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 40,213,332 15 2038 02/01/39 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 41,584,603 15.5 2039 08/01/39 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 42,949,051 16 2039 02/01/40 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 44,306,711 16.5 2040 08/01/40 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 45,657,616 17 2040 02/01/41 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 47,001,800 17.5 2041 08/01/41 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 48,339,297 18 2041 02/01/42 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 49,670,140 18.5 2042 08/01/42 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 50,994,361 19 2042 02/01/43 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 52,311,995 19.5 2043 08/01/43 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 53,623,073 20 2043 02/01/44 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 54,927,628 20.5 2044 08/01/44 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 56,225,693 21 2044 02/01/45 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 57,517,300 21.5 2045 08/01/45 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 58,802,480 22 2045 02/01/46 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 60,081,267 22.5 2046 08/01/46 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 61,353,692 23 2046 02/01/47 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 62,619,787 23.5 2047 08/01/47 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 63,879,582 24 2047 02/01/48 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 65,133,110 24.5 2048 08/01/48 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 66,380,401 25 2048 02/01/49 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 67,621,487 25.5 2049 08/01/49 100%2,703,017 (145,313) (23,933) 2,533,771 141.587%3,587,491 1,793,746 (6,457) (178,729) 1,608,559 68,856,399 26 2049 02/01/50 Total 88,431,114 (318,352) (8,811,276) 79,301,486 Present Value From 08/01/2023 Present Value Rate 1.00%76,783,530 (276,421) (7,650,711) 68,856,399 Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\HOPKINS\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 1-6 (325 Blake) (2021)\Cash flows\TIF Run 6-30-21 FINAL Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District as a Redevelopment District Hopkins Cold Storage Redevelopment TIF District Hopkins, Minnesota June 9, 2017 Prepared For the City of Hopkins Prepared by: LHB, Inc. 701 Washington Avenue North, Suite 200 Minneapolis, Minnesota 55401 LHB Project No. 170285 Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 1 of 11 Final Report TABLE OF CONTENTS PART 1 – EXECUTIVE SUMMARY ................................................................................ 2 Purpose of Evaluation ................................................................................ 2 Scope of 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 Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 2 of 11 Final Report PART 1 – EXECUTIVE SUMMARY PURPOSE OF EVALUATION LHB was hired by the City of Hopkins to inspect and evaluate the properties within a Tax Increment Financing Redevelopment District (“TIF District”) proposed to be established by the City. The proposed TIF District is located at the southeast intersection of Lake Street Northeast and Blake Road North (Diagram 1). The purpose of LHB’s work is to determine whether the proposed TIF District meets the statutory requirements for coverage, and whether one (1) building on one (1) parcel, located within the proposed TIF District, meet the qualifications required for a Redevelopment District. Diagram 1 – Proposed TIF District Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 3 of 11 Final Report SCOPE OF WORK The proposed TIF District consists of one (1) parcel with one (1) building. One (1) building was inspected on May 4, 2017. A Building Code and Condition Deficiency Report for the building that was inspected is located in Appendix B. CONCLUSION After inspecting and evaluating the properties within the proposed TIF District and applying current statutory criteria for a Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10, it is our professional opinion that the proposed TIF District qualifies as a Redevelopment District because: • The proposed TIF District has a coverage calculation of 100 percent which is above the 70 percent requirement. • 100 percent of the buildings are structurally substandard which is above the 50 percent requirement. • The substandard buildings are reasonably distributed. The remainder of this report describes our process and findings in detail. PART 2 – MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS The properties were inspected in accordance with the following requirements under Minnesota Statutes, Section 469.174, Subdivision 10(c), which states: INTERIOR INSPECTION “The municipality may not make such determination [that the building is structurally substandard] without an interior inspection of the property...” EXTERIOR INSPECTION AND OTHER MEANS “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 from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard.” DOCUMENTATION “Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3(1).” QUALIFICATION REQUIREMENTS Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires three tests for occupied parcels: Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 4 of 11 Final Report A. COVERAGE TEST …“parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or paved or gravel parking lots…” The coverage required by the parcel to be considered occupied is defined under Minnesota Statutes, Section 469.174, Subdivision 10(e), which states: “For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or other similar structures.” B. CONDITION OF BUILDINGS TEST Minnesota Statutes, Section 469.174, Subdivision 10(a) states, “…and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance;” 1. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision 10(b), which states: “For purposes of this subdivision, ‘structurally substandard’ shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” a. We do not count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b) defined as “structurally substandard”, due to concerns expressed by the State of Minnesota Court of Appeals in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13, 2001. 2. Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Subdivision 10(c) which states: “A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new 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, electrical, or structural repairs, or other similar reliable evidence.” “Items of evidence that support such a conclusion [that the building is not disqualified] include recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence.” LHB counts energy code deficiencies toward the 15 percent code threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c)) for the following reasons: • The Minnesota energy code is one of ten building code areas highlighted by the Minnesota Department of Labor and Industry website where minimum construction standards are required by law. Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 5 of 11 Final Report • Chapter 13 of the 2015 Minnesota Building Code states, “Buildings shall be designed and constructed in accordance with the International Energy Conservation Code.” Furthermore, Minnesota Rules, Chapter 1305.0021 Subpart 9 states, “References to the International Energy Conservation Code in this code mean the Minnesota Energy Code…” • The Senior Building Code Representative for the Construction Codes and Licensing Division of the Minnesota Department of Labor and Industry confirmed that the Minnesota Energy Code is being enforced throughout the State of Minnesota. • In a January 2002 report to the Minnesota Legislature, the Management Analysis Division of the Minnesota Department of Administration confirmed that the construction cost of new buildings complying with the Minnesota Energy Code is higher than buildings built prior to the enactment of the code. • Proper TIF analysis requires a comparison between the replacement value of a new building built under current code standards with the repairs that would be necessary to bring the existing building up to current code standards. In order for an equal comparison to be made, all applicable code chapters should be applied to both scenarios. Since current construction estimating software automatically applies the construction cost of complying with the Minnesota Energy Code, energy code deficiencies should also be identified in the existing structures. C. DISTRIBUTION OF SUBSTANDARD BUILDINGS Minnesota Statutes, Section 469.174, Subdivision 10, defines a Redevelopment District and requires one or more of the following conditions, “reasonably distributed throughout the district.” (1) “Parcels consisting of 70 percent of the area of 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, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) the property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities, or excessive or vacated railroad rights-of-way; (3) tank facilities, or property whose immediately previous use was for tank facilities…” Our interpretation of the distribution requirement is that the substandard buildings must be reasonably distributed throughout the district as compared to the location of all buildings in the district. For example, if all of the buildings in a district are located on one half of the area of the district, with the other half occupied by parking lots (meeting the required 70 percent coverage for the district), we would evaluate the distribution of the substandard buildings compared with only the half of the district where the buildings are located. If all of the buildings in a district are located evenly throughout the entire area of the district, the substandard buildings must be reasonably distributed throughout the entire area of the district. We believe this is consistent with the opinion expressed by the State of Minnesota Court of Appeals in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13, 2001. Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 6 of 11 Final Report PART 3 – PROCEDURES FOLLOWED LHB inspected one (1) building during the day of May 4, 2017. PART 4 – FINDINGS A. COVERAGE TEST 1. The total square foot area of the parcel in the proposed TIF District was obtained from City records, GIS mapping and site verification. 2. The total square foot area of buildings and site improvements on the parcels in the proposed TIF District was obtained from City records, GIS mapping and site verification. 3. The percentage of coverage for each parcel in the proposed TIF District was computed to determine if the 15 percent minimum requirement was met. The total square footage of parcels meeting the 15 percent requirement was divided into the total square footage of the entire district to determine if the 70 percent requirement was met. FINDING: The proposed TIF District met the coverage test under Minnesota Statutes, Section 469.174, Subdivision 10(e), which resulted in parcels consisting of 100 percent of the area of the proposed TIF District being occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures (Diagram 2). This exceeds the 70 percent area coverage requirement for the proposed TIF District under Minnesota Statutes, Section 469.174, Subdivision (a) (1). Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 7 of 11 Final Report Diagram 2 – Coverage Diagram Shaded area depicts a parcel more than 15 percent occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures B. CONDITION OF BUILDING TEST 1. BUILDING INSPECTION The first step in the evaluation process is the building inspection. After an initial walk- thru, the inspector makes a judgment whether or not a building “appears” to have enough defects or deficiencies of sufficient total significance to justify substantial renovation or clearance. If it does, the inspector documents with notes and photographs code and non- code deficiencies in the building. Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 8 of 11 Final Report 2. REPLACEMENT COST The second step in evaluating a building to determine if it is substandard to a degree requiring substantial renovation or clearance is to determine its replacement cost. This is the cost of constructing a new structure of the same square footage and type on site. Replacement costs were researched using R.S. Means Cost Works square foot models for 2017. A replacement cost was calculated by first establishing building use (office, retail, residential, etc.), building construction type (wood, concrete, masonry, etc.), and building size to obtain the appropriate median replacement cost, which factors in the costs of construction in Hopkins, Minnesota. Replacement cost includes labor, materials, and the contractor’s overhead and profit. Replacement costs do not include architectural fees, legal fees or other “soft” costs not directly related to construction activities. Replacement cost for each building is tabulated in Appendix A. 3. CODE DEFICIENCIES The next step in evaluating a building is to determine what code deficiencies exist with respect to such building. Code deficiencies are those conditions for a building which are not in compliance with current building codes applicable to new buildings in the State of Minnesota. Minnesota Statutes, Section 469.174, Subdivision 10(c), specifically provides that a building cannot be considered structurally substandard if its code deficiencies are not at least 15 percent of the replacement cost of the building. As a result, it was necessary to determine the extent of code deficiencies for each building in the proposed TIF District. The evaluation was made by reviewing all available information with respect to such buildings contained in City Building Inspection records and making interior and exterior inspections of the buildings. LHB utilizes the current Minnesota State Building Code as the official code for our evaluations. The Minnesota State Building Code is actually a series of provisional codes written specifically for Minnesota only requirements, adoption of several international codes, and amendments to the adopted international codes. After identifying the code deficiencies in each building, we used R.S. Means Cost Works 2017; Unit and Assembly Costs to determine the cost of correcting the identified deficiencies. We were then able to compare the correction costs with the replacement cost of each building to determine if the costs for correcting code deficiencies meet the required 15 percent threshold. FINDING: One (1) out of one (1) buildings (100 percent) in the proposed TIF District contained code deficiencies exceeding the 15 percent threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c). Building Code, Condition Deficiency and Context Analysis Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 9 of 11 Final Report reports for the buildings in the proposed TIF District can be found in Appendix B of this report. 4. SYSTEM CONDITION DEFICIENCIES If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), then in order for such building to be “structurally substandard” under Minnesota Statutes, Section 469.174, Subdivision 10(b), the building’s defects or deficiencies should be of sufficient total significance to justify “substantial renovation or clearance.” Based on this definition, LHB re-evaluated each of the buildings that met the code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), to determine if the total deficiencies warranted “substantial renovation or clearance” based on the criteria we outlined above. System condition deficiencies are a measurement of defects or substantial deterioration in site elements, structure, exterior envelope, mechanical and electrical components, fire protection and emergency systems, interior partitions, ceilings, floors and doors. The evaluation of system condition deficiencies was made by reviewing all available information contained in City records, and making interior and exterior inspections of the buildings. LHB only identified system condition deficiencies that were visible upon our inspection of the building or contained in City records. We did not consider the amount of “service life” used up for a particular component unless it was an obvious part of that component’s deficiencies. After identifying the system condition deficiencies in each building, we used our professional judgment to determine if the list of defects or deficiencies is of sufficient total significance to justify “substantial renovation or clearance.” FINDING: In our professional opinion, one (1) out of one (1) buildings (100 percent) in the proposed TIF District are structurally substandard to a degree requiring substantial renovation or clearance, because of defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. This exceeds the 50 percent requirement of Subdivision 10a(1). C. DISTRIBUTION OF SUBSTANDARD STRUCTURES Much of this report has focused on the condition of individual buildings as they relate to requirements identified by Minnesota Statutes, Section 469.174, Subdivision 10. It is also important to look at the distribution of substandard buildings throughout the geographic area of the proposed TIF District (Diagram 3). Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 10 of 11 Final Report FINDING: The parcels with substandard buildings are reasonably distributed compared to all parcels that contain buildings. Diagram 3 – Substandard Buildings Shaded green area depicts parcels with buildings. Shaded orange area depicts substandard buildings. Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 11 of 11 Final Report PART 5 - TEAM CREDENTIALS Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst Michael has 29 years of experience as project principal, project manager, project designer and project architect on planning, urban design, educational, commercial and governmental projects. He has become an expert on Tax Increment Finance District analysis assisting over 100 cities with strategic planning for TIF Districts. He is an Architectural Principal at LHB and currently leads the Minneapolis office. Michael completed a two-year Bush Fellowship, studying at MIT and Harvard in 1999, earning Masters degrees in City Planning and Real Estate Development from MIT. He has served on more than 50 committees, boards and community task forces, including a term as a City Council President and as Chair of a Metropolitan Planning Organization. Most recently, he served as Chair of the Edina, Minnesota planning commission and is currently a member of the Edina city council. Michael has also managed and designed several award-winning architectural projects, and was one of four architects in the Country to receive the AIA Young Architects Citation in 1997. Philip Waugh – Project Manager/TIF Analyst Philip is a project manager with 13 years of experience in historic preservation, building investigations, material research, and construction methods. He previously worked as a historic preservationist and also served as the preservation specialist at the St. Paul Heritage Preservation Commission. Currently, Phil sits on the Board of Directors for the Preservation Alliance of Minnesota. His current responsibilities include project management of historic preservation projects, performing building condition surveys and analysis, TIF analysis, writing preservation specifications, historic design reviews, writing Historic Preservation Tax Credit applications, preservation planning, and grant writing. Phil Fisher – Inspector For 35 years, Phil Fisher worked in the field of Building Operations in Minnesota including White Bear Lake Area Schools. At the University of Minnesota he earned his Bachelor of Science in Industrial Technology. He is a Certified Playground Safety Inspector, Certified Plant Engineer, and is trained in Minnesota Enterprise Real Properties (MERP) Facility Condition Assessment (FCA). His FCA training was recently applied to the Minnesota Department of Natural Resources Facilities Condition Assessment project involving over 2,000 buildings. O:\17Proj\170285\400 Design\406 Reports\Final Report\170285 20170609 Hopkins Cold Storage Redevelopment TIF Report.docx 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 Property Condition Assessment Summary Sheet Hopkins Cold Storage Redevelopment TIF DistrictHopkins, MinnesotaProperty Condition Assessment Summary SheetTIF Map No.PID # Property AddressImproved or VacantSurvey Method UsedSite Area(S.F.)Coverage Area of Improvements(S.F.)Coverage Percent of ImprovementsCoverageQuantity(S.F.)No. of BuildingsBuildingReplacementCost15% of Replacement CostBuilding Code DeficienciesNo. of Buildings Exceeding 15% CriteriaNo. of buildings determined substandardA1911721140002 325 Blake Rd N Improved Interior/Exterior733,621 529,820 72.2% 733,621 1 $17,045,968 $2,556,895 $4,977,430 1 1TOTALS 733,621733,621 1 11100.0% 100.0%O:\17Proj\170285\400 Design\406 Reports\Final Report\[170285 20170609 Hopkins Cold Storage Redevelopment TIF Summary.xlsx]Property Info100.0%Total Coverage Percent:Percent of buildings exceeding 15 percent code deficiency threshold: Percent of buildings determined substandard: Hopkins Cold Storage Redevelopment TIF DistrictLHB Project Number 170285Page 1 of 1Property Condition Assessment Summary Sheet APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports Hopkins Cold Storage Redevelopment TIF District Page 1 of 3 Building Report LHB Project No. 170285 Parcel A, Hopkins Cold Storage Hopkins Cold Storage Redevelopment TIF District Building Code, Condition Deficiency and Context Analysis Report June 9, 2017 Parcel No. & Building Name: Parcel A Hopkins Cold Storage - Commercial Address: 325 Blake Road North, Hopkins, Minnesota 55343 Parcel ID: 19-117-21-14-0002 Inspection Date(s) & Time(s): May 4, 2017 3:30 PM Inspection Type: Interior and Exterior Summary of Deficiencies: It is our professional opinion that this building is Substandard because: - Substantial renovation is required to correct Conditions found. - Building Code deficiencies total more than 15% of replacement cost, NOT including energy code deficiencies. Estimated Replacement Cost: $17,045,968 Estimated Cost to Correct Building Code Deficiencies: $4,977,430 Percentage of Replacement Cost for Building Code Deficiencies: 29.20% Defects in Structural Elements 1. Foundation walls are cracked and allowing for water intrusion contrary to code. 2. Metal structural building members are rusting and should be repaired and protected per code. 3. Interior structural walls are showing signs of separation at intersections. Combination of Deficiencies 1. Essential Utilities and Facilities a. There are no ADA compliant restrooms. b. There is no ADA compliant entrance into the building. c. There is no ADA compliant way to get between levels. d. Door hardware is not ADA code compliant. e. Overhead warehouse doors are not code compliant for lack of functional safety devices. f. Shower is not ADA code compliant. g. Staff break room is not ADA code compliant. h. Stairway handrails do not comply with ADA code. 2. Light and Ventilation a. HVAC system does not comply with mechanical/building code. b. Light fixtures are damaged or missing in several areas. Hopkins Cold Storage Redevelopment TIF District Page 2 of 3 Building Report LHB Project No. 170285 Parcel A, Hopkins Cold Storage 3. Fire Protection/Adequate Egress a. No code required smoke detectors were observed. b. Code compliant emergency lighting should be installed. c. The exterior concrete steps do not meet code compliance for tread rise. d. The exterior metal steps do not meet code compliance for tread rise. e. Interior controlled doors do not comply with code for emergency egress. There is no power backup or manual override device. f. The freezer room doors are not code compliant because they cannot be operated from the inside if door is locked from the outside. g. Vinyl floor tile is missing/damaged creating an impediment to emergency egress, contrary to code. h. Carpeting is wrinkled causing an impediment to emergency egress, contrary to code. i. The boiler room should have a second means of egress installed per code. j. The stairway leading to the upper breakroom should be enclosed per code. 4. Layout and Condition of Interior Partitions/Materials a. Interior walls should be painted. b. Carpeting should be replaced. c. Vinyl tile should be replaced. d. Concrete floors are cracked. e. Ceiling tile is missing/damaged. f. Interior glass windows are not code compliant. g. Mold is growing on interior surfaces. h. Mechanical devices are not protected per OSHA code. i. Interior pallet racking is not secured and is out of alignment. 5. Exterior Construction a. Exterior face brick is damaged and/or missing, allowing for water intrusion, contrary to code. b. Exterior concrete block is damaged and/or missing allowing for water intrusion, contrary to code. c. Expansion joint caulking is damaged and/or missing, allowing for water intrusion, contrary to code. d. Metal window frames are rusting and should be replaced to prevent water intrusion per code. e. Concrete window sills are damaged/cracked and allowing for water intrusion, contrary to code. f. Caulking around air vents is missing allowing for water intrusion, contrary to code. g. Exterior walls need to be repainted. h. Exterior electrical outlets are not code compliant. i. Canvas awnings are damaged and stained. j. One third of the roof is allowing for water intrusion, which is contrary to code. Description of Code Deficiencies 1. Foundation walls should be repaired to prevent water intrusion per code. 2. Metal structural members should have rust removed and surfaces protected per code. 3. An ADA code compliant restroom should be installed. 4. A building entrance should be modified to create an ADA code compliant means of access. 5. Elevators should be installed to create an accessible route between levels. 6. ADA code compliant door hardware should be installed. Hopkins Cold Storage Redevelopment TIF District Page 3 of 3 Building Report LHB Project No. 170285 Parcel A, Hopkins Cold Storage 7. Safety devices should be installed on all overhead warehouse doors per code. 8. The shower on the second floor is not ADA code compliant. 9. Staff break room is not ADA code compliant. 10. Stairway handrails do not comply with code. 11. The HVAC system does not comply with mechanical/building code. 12. Code compliant smoke detectors should be installed. 13. Code compliant emergency lighting should be installed. 14. Exterior concrete stairs do not meet code for proper tread rise. 15. Exterior metal stairs do not meet code for proper tread rise. 16. Interior transfer doors do not meet code for emergency exiting in the event of power failure. 17. Freezer room doors do not comply with code for emergency egress if they are locked from the outside. 18. Vinyl flooring is damaged and causing an impediment to emergency egress per code. 19. Carpeting is wrinkled and causing an impediment to emergency egress per code. 20. The boiler room should have a second means of egress per code. 21. Metal stairway leading to the upper break room should be enclosed per code. 22. Metal stairway leading out of mechanical room basement should be enclosed per code. 23. Interior glass windows are not code compliant. 24. Mechanical pumps in the boiler room are not properly protected per code. 25. Mechanical door opener at tall bay storage area is not properly protected per code. 26. Exterior brick is damaged/missing allowing for water intrusion, contrary to code. 27. Exterior concrete block is damaged/missing allowing for water intrusion, contrary to code. 28. Expansion joint caulking should be replaced to prevent water intrusion per code. 29. Metal window frames are rusting and should be replaced to prevent water intrusion per code. 30. Concrete window sills are cracked and allowing for water intrusion, contrary to code. 31. Caulking is missing around air vents allowing for water intrusion, contrary to code. 32. Exterior electrical outlets are not code compliant. 33. One third of the roof is allowing for water intrusion and should be replaced per code. Overview of Deficiencies This cold storage facility has been in operation for 67 years with at least two or more additions. The stress of this type of operation is showing on both the inside and outside of the buildings structure. Exterior brick and block surfaces over the entire building are damaged, cracked, or missing allowing for water intrusion, contrary to code. Metal structural members are rusting and should be protected per code from further erosion. All exterior surfaces should be repainted. Metal window frames are rusting and should be replaced. The building is not ADA code compliant for access into the building and to all levels. There is no ADA code compliant restroom. The building HVAC system is not code compliant. Code compliant smoke detectors and an emergency notification system should be installed. Freezer doors, interior transfer doors and overhead warehouse doors are not code compliant, lacking code compliant safety devices. The boiler room does not comply with code because it has only one means of egress. Vinyl and carpeted flooring should be replaced. Interior ceiling tile is missing and/or damaged. Interior office lights are missing and/or damaged. One third of the roof has failed and should be replaced to prevent water intrusion per code. O:\17Proj\170285\400 Design\406 Reports\Building Reports\170285 20170609 Hopkins Cold Storage Building Report.docx APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs Hopkins Cold Storage Redevelopment TIF District Replacement Cost Report Square Foot Cost Estimate Report Date:5/15/2017 Hopkins Cold Storage City of Hopkins 325 Blake Road , Hopkins , Minnesota 55343 Building Type: Warehouse with Brick Veneer / Reinforced Concrete Location:HOPKINS, MN Story Count:1 Story Height (L.F.):24 Floor Area (S.F.):270000 Labor Type:OPN Basement Included:No Data Release:Year 2017 Cost Per Square Foot:$62.78 Building Cost:$17,045,968.15 % of Total Cost Per S.F. Cost 12.37% 7.75 2090449.19 A1010 Standard Foundations 1.58 426347.39 0.74 200686.25 0.37 99848.25 0.47 125812.89 A1030 Slab on Grade 5.99 1616279.40 5.99 1616279.40 A2010 Basement Excavation 0.18 47822.40 0.18 47822.40 39.74% 24.87 6713673.90 B1010 Floor Construction 3.67 989707.37 1.09 294611.21 0.79 212861.31 1.79 482234.85 B1020 Roof Construction 6.07 1638900.00 6.07 1638900.00 B2010 Exterior Walls 8.68 2344411.86 8.68 2344411.86 B2020 Exterior Windows 0.16 42162.40 Concrete I beam, precast, 18" x 36", 790 PLF, 25' span, 6.44 KLF superimposed load Cast‐in‐place concrete beam and slab, 7.5" slab, two way, 12" column, 25'x25' bay, 40 PSF superimposed load, 149 PSF total load Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns and bearing wall, 20'x25' bay, 20" deep, 40 PSF superimposed load, 60 PSF total load Brick wall, composite double wythe, standard face/CMU back‐up, 8" thick, perlite core fill, 3" XPS Cast‐in‐place concrete column, 20", square, tied, minimum reinforcing, 500K load, 10'‐14' story height, 375 lbs/LF, 4000PSI Estimate Name: Costs are derived from a building model with basic components. Scope differences and market conditions can cause costs to vary significantly. A Substructure Foundation wall, CIP, 4' wall height, direct chute, .148 CY/LF, 7.2 PLF, 12" thick 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, 5" thick, non industrial, reinforced Excavate and fill, 30,000 SF, 4' deep, sand, gravel, or common earth, on site storage B Shell Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 1 of 3 Replacement Cost Report Parcel A, Hopkins Cold Storage 0.16 42162.40 B2030 Exterior Doors 1.24 335630.03 0.19 51899.63 0.26 71305.20 0.79 212425.20 B3010 Roof Coverings 5.00 1350528.23 1.65 446058.90 2.98 803989.80 0.26 70138.13 0.11 30341.40 B3020 Roof Openings 0.05 12334.01 0.01 1147.15 0.04 11186.86 5.61% 3.51 1035106.12 C1010 Partitions 0.85 230841.60 0.28 75711.02 0.22 59864.00 0.21 57882.13 0.14 37384.45 C1020 Interior Doors 0.24 151200.00 0.56 151200.00 C2010 Stair Construction 0.12 32598.90 0.12 32598.90 C3010 Wall Finishes 0.47 126472.79 0.19 51906.20 0.09 23848.06 0.19 50718.53 C3020 Floor Finishes 1.78 480732.83 0.54 145759.91 1.19 321222.92 0.05 13750.00 C3030 Ceiling Finishes 0.05 13260.00 0.05 13260.00 30.53% 19.09 5156814.37 D1010 Elevators and Lifts 0.58 157504.00 0.58 157504.00 D2010 Plumbing Fixtures 0.52 141451.20 0.21 55360.80 0.04 11878.20 0.11 28789.20 0.11 29295.00 Concrete topping, hardeners, metallic additive, minimum Concrete topping, hardeners, metallic additive, maximum Vinyl, composition tile, maximum Acoustic ceilings, 5/8" mineral fiber, 12" x 12" tile, 1" x 3" wood, 12" OC grid, wood support D Services Hydraulic, passenger elevator, 4500 lb, 2 floors, 100 FPM 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 CI,wall hung w/rim guard, 24" x 20" Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2 coats Roof hatch, with curb, 1" fiberglass insulation, 2'‐6" x 3'‐0", galvanized steel, 165 lbs Smoke hatch, unlabeled, galvanized, 2'‐6" x 3', not incl hand winch operator C Interiors Concrete block (CMU) partition, light weight, hollow, 6" thick, no finish framing, same opposite face, no insulation Gypsum board, 1 face only, exterior sheathing, fire resistant, 5/8" Add for the following: taping and finishing Door, single leaf, kd steel frame, hollow metal, commercial quality, flush, 8'‐0" x 10'‐0" x 2" Stairs, steel, grate type w/nosing & rails, 20 risers, with landing 2 coats paint on masonry with block filler Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2 coats Gravel stop, aluminum, extruded, 4", mill finish, .050" thick Windows, aluminum, sliding, standard glass, 5' x 3' 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 Roofing, single ply membrane, EPDM, 60 mils, loosely laid, stone ballast 4" thick, R20 Roof edges, aluminum, duranodic, .050" thick, 6" face Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 2 of 3 Replacement Cost Report Parcel A, Hopkins Cold Storage 0.06 16128.00 D2020 Domestic Water Distribution 0.25 67266.00 0.25 67266.00 D2040 Rain Water Drainage 0.50 134974.00 0.44 118539.00 0.06 16435.00 D3020 Heat Generating Systems 5.21 1407261.60 5.21 1407261.60 D3050 Terminal & Package Units 0.84 226292.40 0.84 226292.40 D4010 Sprinklers 4.13 1113912.00 4.13 1113912.00 D4020 Standpipes 0.50 135846.00 0.50 135846.00 D5010 Electrical Service/Distribution 0.06 17234.13 0.01 2961.88 0.01 2335.50 0.04 11936.75 D5020 Lighting and Branch Wiring 3.70 999845.91 0.83 224915.40 0.14 38491.20 0.16 44093.70 0.06 16919.82 2.50 675425.79 D5030 Communications and Security 2.80 755227.13 2.59 699906.60 0.20 55320.53 2.96% 1.85 500291.10 E1030 Vehicular Equipment 1.85 500291.10 0.32 85050.00 1.54 415241.10 0%0 0 100% $57.07 $15,496,334.68 10.00% $5.71 $1,549,633.47 0.00% $0.00 $0.00 0.00% $0.00 $0.00 $62.78 $17,045,968.15 Architectural Fees User Fees Total Building Cost Contractor Fees (General Conditions,Overhead,Profit) 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 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 E Equipment & Furnishings Architectural equipment, dock boards, heavy duty, 5' x 5', aluminum, 5000 lb capacity Architectural equipment, dock levelers, hydraulic, 7' x 8', 10 ton capacity G Building Sitework SubTotal Miscellaneous power, to .5 watts Roof drain, DWV PVC, 5" diam, 10' high Roof drain, steel galv sch 40 threaded, 5" diam piping, for each additional foot add Warehouse ventilization with boiler heat system 24,000 CFM Supply and Exhaust Rooftop, single zone, air conditioner, offices, 3,000 SF, 9.50 ton Dry pipe sprinkler systems, grooved steel, black, sch 40 pipe, ordinary hazard, 1 floor, 10,000 SF Wet standpipe risers, class III, steel, black, sch 40, 6" diam pipe, 1 floor 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, 3 phase, 400 A Receptacles incl plate, box, conduit, wire, 5 per 1000 SF, .6 watts per SF Wall switches, 1.0 per 1000 SF Gas fired water heater, commercial, 100< F rise, 75.5 MBH input, 63 GPH Water cooler, electric, wall hung, wheelchair type, 7.5 GPH Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 3 of 3 Replacement Cost Report Parcel A, Hopkins Cold Storage Hopkins Cold Storage Redevelopment TIF District Code Deficiency Cost Report Parcel A -325 Blake Road North, Hopkins, MN 55343 - Parcel ID 19-117-21-14-0002 Code Related Cost Items Unit Cost Units Unit Quantity Total Accessibility Items Restroom Install ADA code compliant restroom 0.52$ SF 270,000 140,400.00$ Building Entrance Create ADA code compliant entrance into building 5,000.00$ Lump 1 5,000.00$ Elevators Install two ADA code compliant elevators to gain access to all levels 0.58$ SF 270,000 156,600.00$ Door Hardware Install ADA code compliant door hardware on all doors 250.00$ EA 50 12,500.00$ Shower Install ADA code compliant shower on second floor 1,500.00$ Lump 1 1,500.00$ Staff Break Room Modify staff break room to comply with ADA code 1,500.00$ Lump 1 1,500.00$ Structural Elements Concrete Foundation Walls Repair concrete foundation walls to prevent water intrusion per code 0.38$ SF 270,000 102,600.00$ Metal Structural Members Exterior metal structural members should be repaired and protected from rust per code 0.69$ SF 270,000 186,300.00$ Interior Windows Interior windows are not code compliant and should be replaced with tempered glass 150.00$ Lump 12 1,800.00$ Exiting Overhead Warehouse Doors Install code compliant safety devices 1,000.00$ EA 25 25,000.00$ Stairways Install code compliant hand rails 250.00$ Lump 1 250.00$ Modify exterior concrete stairs to comply with code for proper rise of tread 2,500.00$ Lump 1 2,500.00$ Modify exterior metal stairs to comply with code for proper rise of tread 1,500.00$ EA 10 15,000.00$ Interior Overhead Transfer Door Install code approved safety device to release door in the event of a power failure 1,000.00$ EA 1 1,000.00$ Freezer Room Doors Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 1 of 3 Code Deficiency Cost Report Parcel A, Cold Storage Code Related Cost Items Unit Cost Units Unit Quantity Total Install code approved safety device to release door from the interior should the exterior side be locked 1,500.00$ EA 40 60,000.00$ Flooring Replace damaged vinyl tile to create an unimpeded emergency egress per code 0.05$ SF 270,000 13,500.00$ Replace wrinkled carpet to create an unimpeded emergency egress per code 0.05$ SF 270,000 13,500.00$ Boiler Room Install second means of egress from boiler room per code 25,000.00$ Lump 1 25,000.00$ Interior Metal Stairways Metal stairway to second floor breakroom should be enclosed per code 2,500.00$ Lump 1 2,500.00$ Metal stairway from basement mechanical room should be enclosed per code 2,500.00$ Lump 1 2,500.00$ Fire Protection Smoke Detectors Install code compliant smoke detectors 2.59$ SF 270,000 699,300.00$ Emergency Lighting Install code compliant emergency lighting 0.75$ SF 270,000 202,500.00$ Exterior Construction Exterior Brick Repair/replace damaged and missing brick to prevent water intrusion per code 4.15$ SF 70,000 290,500.00$ Exterior Concrete Block Repair/replace damaged and concrete block and mortar joints to prevent water intrusion per code 4.15$ SF 200,000 830,000.00$ Exterior Control Joints Remove/replace caulking in exterior control joints to prevent water intrusion per code 4.23$ LF 1,000 4,230.00$ Windows and Sills Remove/replace metal windows to prevent water intrusion per code 0.16$ SF 270,000 43,200.00$ Repair/replace concrete window sills to prevent water intrusion per code 1,000.00$ EA 2 2,000.00$ Air Vents Remove/replace caulking around exterior air vents 500.00$ Lump 1 500.00$ Roof Construction Roofing Material Remove damaged one third of roofing material 0.50$ SF 90,000 45,000.00$ Replace damaged one third of roofing material 5.05$ SF 90,000 454,500.00$ Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 2 of 3 Code Deficiency Cost Report Parcel A, Cold Storage Code Related Cost Items Unit Cost Units Unit Quantity Total Mechanical- Electrical Mechanical Install code compliant HVAC system 6.05$ SF 270,000 1,633,500.00$ Mechanical pumps in the boiler room should be protected per code 250.00$ EA 2 500.00$ Mechanical door operator in high bay room should be protected per code 250.00$ EA 1 250.00$ Electrical Install code compliant exterior electrical outlets around building 2,500.00$ Lump 1 2,500.00$ Total Code Improvements 4,977,430$ Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Page 3 of 3 Code Deficiency Cost Report Parcel A, Cold Storage Hopkins Cold Storage Redevelopment TIF District Photos: Parcel A - 325 Blake Road North - Hopkins Cold Storage Page 1 of 25 20170504_162409.jpg 20170504_162445.jpg 20170504_163047.jpg 20170504_163059.jpg 20170504_163307.jpg 20170504_163348.jpg 20170504_163523.jpg 20170504_163526.jpg 20170504_163823.jpg 20170504_163836.jpg 20170504_163843.jpg 20170504_163850.jpg Page 2 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage 20170504_163927.jpg 20170504_164210_001.jpg 20170504_164217.jpg 20170504_164300.jpg 20170504_164314.jpg 20170504_164621.jpg IMG_0183.JPG IMG_0184.JPG IMG_0185.JPG IMG_0186.JPG IMG_0187.JPG IMG_0188.JPG Page 3 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0189.JPG IMG_0190.JPG IMG_0191.JPG IMG_0192.JPG IMG_0193.JPG IMG_0194.JPG IMG_0195.JPG IMG_0196.JPG IMG_0197.JPG IMG_0198.JPG IMG_0199.JPG IMG_0200.JPG Page 4 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0201.JPG IMG_0202.JPG IMG_0203.JPG IMG_0204.JPG IMG_0205.JPG IMG_0206.JPG IMG_0207.JPG IMG_0208.JPG IMG_0209.JPG IMG_0210.JPG IMG_0211.JPG IMG_0212.JPG Page 5 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0213.JPG IMG_0214.JPG IMG_0215.JPG IMG_0216.JPG IMG_0217.JPG IMG_0218.JPG IMG_0219.JPG IMG_0220.JPG IMG_0221.JPG IMG_0222.JPG IMG_0223.JPG IMG_0224.JPG Page 6 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0225.JPG IMG_0226.JPG IMG_0227.JPG IMG_0228.JPG IMG_0229.JPG IMG_0230.JPG IMG_0231.JPG IMG_0232.JPG IMG_0233.JPG IMG_0234.JPG IMG_0235.JPG IMG_0236.JPG Page 7 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0237.JPG IMG_0238.JPG IMG_0239.JPG IMG_0240.JPG IMG_0241.JPG IMG_0242.JPG IMG_0243.JPG IMG_0244.JPG IMG_0245.JPG IMG_0246.JPG IMG_0247.JPG IMG_0248.JPG Page 8 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0249.JPG IMG_0250.JPG IMG_0251.JPG IMG_0252.JPG IMG_0253.JPG IMG_0254.JPG IMG_0255.JPG IMG_0256.JPG IMG_0257.JPG IMG_0258.JPG IMG_0259.JPG IMG_0260.JPG Page 9 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0261.JPG IMG_0262.JPG IMG_0263.JPG IMG_0264.JPG IMG_0265.JPG IMG_0266.JPG IMG_0267.JPG IMG_0268.JPG IMG_0269.JPG IMG_0270.JPG IMG_0271.JPG IMG_0272.JPG Page 10 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0273.JPG IMG_0274.JPG IMG_0275.JPG IMG_0276.JPG IMG_0277.JPG IMG_0278.JPG IMG_0279.JPG IMG_0280.JPG IMG_0281.JPG IMG_0282.JPG IMG_0283.JPG IMG_0284.JPG Page 11 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0285.JPG IMG_0286.JPG IMG_0287.JPG IMG_0288.JPG IMG_0289.JPG IMG_0290.JPG IMG_0291.JPG IMG_0292.JPG IMG_0293.JPG IMG_0294.JPG IMG_0295.JPG IMG_0296.JPG Page 12 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage IMG_0297.JPG IMG_0298.JPG IMG_0299.JPG IMG_0300.JPG IMG_0301.JPG IMG_0302.JPG P1130352.JPG P1130353.JPG P1130354.JPG P1130355.JPG P1130356.JPG P1130357.JPG Page 13 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130358.JPG P1130359.JPG P1130360.JPG P1130361.JPG P1130362.JPG P1130363.JPG P1130364.JPG P1130365.JPG P1130366.JPG P1130367.JPG P1130368.JPG P1130369.JPG Page 14 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130370.JPG P1130371.JPG P1130372.JPG P1130373.JPG P1130374.JPG P1130375.JPG P1130376.JPG P1130377.JPG P1130378.JPG P1130379.JPG P1130380.JPG P1130381.JPG Page 15 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130382.JPG P1130383.JPG P1130384.JPG P1130385.JPG P1130386.JPG P1130387.JPG P1130388.JPG P1130389.JPG P1130390.JPG P1130391.JPG P1130392.JPG P1130393.JPG Page 16 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130394.JPG P1130395.JPG P1130396.JPG P1130397.JPG P1130398.JPG P1130399.JPG P1130400.JPG P1130401.JPG P1130402.JPG P1130403.JPG P1130404.JPG P1130405.JPG Page 17 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130406.JPG P1130407.JPG P1130408.JPG P1130409.JPG P1130410.JPG P1130411.JPG P1130412.JPG P1130413.JPG P1130414.JPG P1130415.JPG P1130416.JPG P1130417.JPG Page 18 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130418.JPG P1130419.JPG P1130420.JPG P1130421.JPG P1130422.JPG P1130423.JPG P1130424.JPG P1130425.JPG P1130426.JPG P1130427.JPG P1130428.JPG P1130429.JPG Page 19 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130430.JPG P1130431.JPG P1130432.JPG P1130433.JPG P1130434.JPG P1130435.JPG P1130436.JPG P1130437.JPG P1130438.JPG P1130439.JPG P1130440.JPG P1130441.JPG Page 20 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130442.JPG P1130443.JPG P1130444.JPG P1130445.JPG P1130446.JPG P1130447.JPG P1130448.JPG P1130449.JPG P1130450.JPG P1130451.JPG P1130452.JPG P1130453.JPG Page 21 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130454.JPG P1130455.JPG P1130456.JPG P1130457.JPG P1130458.JPG P1130459.JPG P1130460.JPG P1130461.JPG P1130462.JPG P1130463.JPG P1130464.JPG P1130465.JPG Page 22 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130466.JPG P1130467.JPG P1130468.JPG P1130469.JPG P1130470.JPG P1130471.JPG P1130472.JPG P1130473.JPG P1130474.JPG P1130475.JPG P1130476.JPG P1130477.JPG Page 23 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130478.JPG P1130479.JPG P1130480.JPG P1130481.JPG P1130482.JPG P1130483.JPG P1130484.JPG P1130485.JPG P1130486.JPG P1130487.JPG P1130488.JPG P1130489.JPG Page 24 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130490.JPG P1130491.JPG P1130492.JPG P1130493.JPG P1130495.JPG P1130496.JPG P1130497.JPG P1130498.JPG P1130499.JPG P1130500.JPG P1130501.JPG P1130502.JPG Page 25 of 25Hopkins Cold Storage Redevelopment TIF District LHB Project No. 170285 Photos Parcel A, Hopkins Cold Storage P1130503.JPG P1130504.JPG P1130505.JPG P1130506.JPG P1130507.JPG P1130508.JPG P1130509.JPG P1130510.JPG P1130511.JPG P1130512.JPG P1130513.JPG P1130514.JPG CITY OF HOPKINS HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. 2018-063 RESOLUTION OF THE CITY OF HOPKINS FINDING PARCELS ARE OCCUPIED BY A STRUCTURALLY SUBSTANDARD BUILDING AND MEET THE REQUIREMENTS OF A REDEVELOPMENT TIF DISTRICT UNDER MINNESOTA STATUTES, SECTION 469.174, SUBD. 10 WHEREAS, it has been proposed that the City Council for the City of Hopkins, Minnesota, (the City"),create a tax increment financing district in an area within the City to be designated a redevelopment district as defined in Minnesota Statutes, Section 469.174, Subd. 10 (the "TIF District"); and WHEREAS, in order to create this type of TIF District, the City must make a determination that before the demolition or removal of any substandard buildings, certain conditions exist; and WHEREAS, the conditions found by the City to exist throughout the proposed TIF District are that parcels consisting of 70 percent of the area of 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, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; and WHEREAS, in order to deem a parcel as being occupied by a structurally substandard building, the City must first pass a resolution before the demolition or removal that the parcel was occupied by one or more structurally substandard buildings and that after demolition and clearance the City intended to include the parcel within the proposed tax increment financing district; and WHEREAS, there exists in the City on the parcel at 325 Blake Road, Hopkins, MN, PID # 19- 117-21-14-0002 (collectively, the "Parcel") one structurally substandard building to be demolished or removed (the "Substandard Building Condition"); and WHEREAS, a parcel is deemed to be occupied by a structurally substandard building if the parcel was occupied by a substandard building or met the criteria of Minnesota Statutes, section 469.174, Subd. 10(e)within three years of the filing of the request for certification of the parcel as part of the district with the county auditor, in addition to other requirements as are required by law. NOW,THEREFORE,BE IT RESOLVED by the City Council for the City of Hopkins that: 1.The Council has received from LHB, Inc.the"Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District as a Redevelopment District — Hopkins Cold Storage Redevelopment TIF District",dated June 9,2017 (the"Inspection Report"),finding that, based on an inspection of the building located on the Parcel, such building was determined to be substandard under the definition set forth in the Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the"TIF Act"). Based on the Inspection Report and other information available to the Council, the Council finds that the building on the Parcel is structurally substandard to a degree requiring substantial renovation (i.e. 100% of the buildings in the proposed TIF District) or clearance and at least 15% of the 529569v2 AMI3 HP145-47 area of the Parcel identified on Exhibit A attached hereto contains improvements including one structurally substandard building and therefore more than 70% of the area of the proposed TIF District is occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures as required by the TIF Act. 2.After the date of approval of this resolution,the buildings on the Parcels may be demolished or removed by the City, or such demolition or removal may be financed by the City, or may be undertaken by a developer under a development agreement with the City. 3.The City intends to include Parcels in a redevelopment TIF District, and to file the request for certification of such district with the Hennepin County auditor within 3 years after the date of demolition of the building on the Parcels. 4.Upon filing the request for certification of a new tax increment financing district, the City will notify the Hennepin County auditor that the original tax capacity of the Parcel must be adjusted to reflect the greater of(a) the current net tax capacity of the parcel, or(b) the estimated market value of the Parcel for the year in which the building was demolished or removed,but applying class rates for the current year, all in accordance with Minnesota Statutes, Section 469.174, Subd. 10(d). 5.City staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution. Adopted by the City Council of the City of Hopkins this 17th day of July, 2018. d441 ' Molly 7Cummings,Malr ATTEST: Amy I omeier, City Clerk Seal) 529569v2 AMB HP145-47 EXHIBIT A i,51'g ee e ' '' t a f 4}.'fit," is q & P 4:';'" w Ae f. . S ,? .' its a,. 4. m x' "c , a" y ' 4, 114.' k y` FY t Rr i i lydlt t' 3: x"W k sk' Y d a' aw.i y o § ave S i i b ` f PARCEL AND PROPOSED TIF DISTRICT 529569v2 AMB HP145-47 A-1 1 DOCSOPEN\HP145\47\740723.v3-8/11/21 CITY OF HOPKINS HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. 2021-045 RESOLUTION ADOPTING A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-6 (325 BLAKE) 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 Development Program therefor. It has been proposed by the HRA and the City that the City adopt a Modification to the Development Program for Redevelopment Project No. 1 (the "Development Program Modification") and establish Tax Increment Financing District No. 1-6 (325 Blake) (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Development Program Modification and the TIF Plan are referred to collectively herein as the "Program and Plan"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1794, all inclusive, as amended, (the "Act") all as reflected in the Program and Plan, and presented for the Council's consideration. 1.02. The HRA and City have investigated the facts relating to the Program and Plan and have caused the Program and Plan to be prepared. 1.03. The HRA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Program and Plan, including, but not limited to, notification of Hennepin County and Independent School District No. 270 having taxing jurisdiction over the property to be included in the District, review of the Program and Plan by the HRA on August 17, 2021, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the ''Reports") relating to the Program and Plan 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 Program and Plan. The Reports, including the redevelopment qualifications reports and planning documents, include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05. The City is not modifying the boundaries of Redevelopment Project No. 1, but is however, modifying the Development Program therefor. Section 2. Findings for the Adoption and Approval of the Development Program Modification 2.01. The Council approves the Development Program Modification, and specifically finds that: (a) the land within the Project area would not be available for redevelopment without the financial aid to be 2 DOCSOPEN\HP145\47\740723.v3-8/11/21 sought under this Development Program; (b) the Development Program, as modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project by private enterprise; and (c) that the Development Program, as modified, conforms to the general plan for the development of the City as a whole. Section 3. Findings for the Establishment of Tax Increment Financing District No. 1-6 (325 Blake) 3.01. The Council hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, 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 Tax Increment Financing Plan, that the Program and Plan conform to the general plan for the development or redevelopment of the City as a whole; and that the Program and Plan 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. Section 4. Public Purpose 4.01. The adoption of the Program and Plan conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide employment opportunities, to improve the tax 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 Adoption of the Program and Plan 5.01. The Program and Plan, 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 Director of Planning and Development. 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 Program and Plan 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 Program and Plan, 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. 3 DOCSOPEN\HP145\47\740723.v3-8/11/21 5.04. The Executive Director is further authorized and directed to file a copy of the Program and Plan with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. Dated: August 17, 2021. By: __________________________________ Jason Gadd, Mayor ATTEST: _____________________________________ Amy Domeier, City Clerk A-1 DOCSOPEN\HP145\47\740723.v3-8/11/21 EXHIBIT A RESOLUTION NO. 2021-045 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for Tax Increment Financing District No. 1-6 (325 Blake) (the “District”), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Tax Increment Financing District No. 1-6 (325 Blake) is a redevelopment district as defined in M.S., Section 469.174, Subd. 10. The District consists of one parcel and vacant right-of-way, with plans to redevelop the area for the construction of approximately 600 apartments, 125 senior cooperative units, 50 town homes and 23,500 sq/ft commercial space. Parcels consisting of 70 percent of the area of 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. (See Appendix D of the TIF Plan.) 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of Tax Increment Financing District No. 1-6 (325 Blake) 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 construction of a high-density development, required parking and significant public improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was selected through a competitive RFP process and all respondents requested public assistance in the form of tax increment financing in order to redevelop the site. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan: This finding is justified on the grounds that the cost of site, roadways, public improvements and utilities add to the total redevelopment cost. Historically, construction costs, site and public improvements costs have made redevelopment infeasible without tax increment assistance. In addition, the developer was selected through a competitive RFP process and all respondents requested public assistance in the form of tax increment financing in order to redevelop the site. 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 $214,571,703. c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $76,783,530. 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 $137,788,172 (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 Council reviewed the TIF Plan on and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for Tax Increment Financing District No. 1-6 (325 Blake) will afford maximum 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. A-2 DOCSOPEN\HP145\47\740723.v3-8/11/21 The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, increased tax base of the State, will increase the availability of safe and decent life-cycle housing in the City, and add high-quality developments to the City. DOCSOPEN\HP145\47\740729.v3-8/11/21 CITY OF HOPKINS HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. 2021-046 RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-6 (325 BLAKE). BE IT RESOLVED by the City Council (the "Council") of the City of Hopkins, Minnesota (the "City"), as follows: Section 1. Background. 1.01. The City has heretofore approved the establishment of Tax Increment Financing District No. 1-6 (325 Blake) (the "TIF District") within Redevelopment Project No. 1 (the "Project"), and has adopted a Tax Increment Financing Plan (the "TIF Plan") for the purpose of financing certain improvements within the Project. 1.02. The City has determined to pay for certain costs identified in the TIF Plan consisting of site improvements/preparation, public improvements, other qualifying improvements, interest and administrative costs (collectively, the "Qualified Costs"), which costs may be financed on a temporary basis from City funds available for such purposes. 1.03. Under Minnesota Statutes, Section 469.178, Subd. 7, the City is authorized to advance or loan money from the City's general fund or any other fund from which such advances may be legally authorized, in order to finance the Qualified Costs. 1.04. The City intends to reimburse itself for the Qualified Costs from tax increments derived from the TIF District in accordance with the terms of this resolution (which terms are referred to collectively as the "Interfund Loan"). Section 2. Terms of Interfund Loan. 2.01. The City hereby authorizes the advance of up to $100,000 from the EDA fund or existing TIF funds or so much thereof as may be paid as Qualified Costs. The City shall reimburse itself for such advances together with interest at the rate stated below. Interest accrues on the principal amount from the date of each advance. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 are from time to time adjusted. The interest rate shall be 4% and will not fluctuate. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the City Manager, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on this Interfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment available after other obligations have been paid, DOCSOPEN\HP145\47\740729.v3-8/11/21 or as determined by the City Administrator, generated in the preceding six (6) months with respect to the property within the TIF District and remitted to the City by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1794, all inclusive, as amended. Payments on this Interfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. 2.04. The principal sum and all accrued interest payable under this Interfund Loan are pre- payable in whole or in part at any time by the City without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. 2.05. This Interfund Loan is evidence of an internal borrowing by the City in accordance with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Interfund Loan or other costs incident hereto. The City shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The City may amend the terms of this Interfund Loan at any time by resolution of the City Council, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Section 3. Effective Date. This resolution is effective upon the date of its approval. Dated: August 17, 2021 By: __________________________________ Jason Gadd, Mayor ATTEST: _____________________________________ Amy Domeier, City Clerk