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2021-045 Resolution Adoption 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 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 DOCSOPEN\HP 145\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. 2 DOCSOPEN\HP 145\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: -eVA Amy Domeier, City Clerk 3 DOCSOPEN\HP 145\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-1 DOCSOPEN\H P 145\47\740723.v3-8/1 1/21 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. A-2 DOCSOPEN\HP 145\47\740723.v3-8/11/21