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V.1. Spending Plan for TIF Districts 1-2, 2-9 and 2-11; ElverumSeptember 21, 2021 Council Report 2021-090 SPENDING PLAN FOR TIF DISTRICTS 1-2, 2-9 AND 2-11 Proposed Action Staff recommends adoption of the following motion following the public hearing: Move to approve Resolution 2021-057 Approving the Spending Plan for TIF Districts 1-2, 2-9 and 2-11. With this motion, the Spending Plan will be submitted to the Office of the State Auditor. Overview The State Legislature amended the TIF law in 2021 to provide flexibility to cities to utilize unobligated TIF balances in existing districts in order to promote construction and job creation in their communities. The law allows HRAs/EDAs/cities to provide assistance for private development that creates or retains jobs, without counting against the pooling limitations of the districts. The City has three TIF Districts that are potential sources of unobligated TIF revenue; No, 1-2 (Entertainment District), 2-9 (Oaks of Main) and 2-11 (SuperValu). The City’s HRA has until December 31, 2022, to transfer the funds to another designated City/HRA fund and the dollars must be spent by December 31, 2025. In order to preserve the ability to use this tool, the City and HRA are required to develop a Spending Plan that identifies the TIF districts that will fund defined projects, hold a public hearing, adopt the Plan and submit it to the State Auditor. The projects identified for possible assistance in the Plan include Blake Road Station by Trilogy and 325 Blake Road by Alatus. Primary Issues to Consider By approving the Spending Plan, the City does not commit any specific assistance to a development project but rather reserves the right to do so in the future by utilizing an incentive available by the State of Minnesota. Supporting Information • Resolution 2021-057 • Memo from Stacie Kvilvang, Ehlers • Spending Plan for TIF Districts 1-2, 2-9 and 2-11 ___________________________ Kersten Elverum Director of Planning & Development Financial Impact: $__0__________Budgeted: Y/N ____ Source: ________________ Related Documents (CIP, ERP, etc.): _______________________________________ Notes: _______________________________________________________________ CITY OF HOPKINS HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. 2021-057 RESOLUTION APPROVING A SPENDING PLAN FOR TAX INCREMENT FINANCING DISTRICTS NO. 1-2, NO. 2-9 AND NO. 2-11 IN THE CITY OF HOPKINS BE IT RESOLVED by the City Council (the "City Council") of the City of Hopkins (the "City"), Hennepin County, Minnesota as follows: Section 1. Background; Findings. (a) The City and the Hopkins Housing and Redevelopment Authority (the "Authority") have previously established Tax Increment Financing Districts No. 1-2, No. 2-9 and No. 2-11 (the "TIF Districts") and adopted the tax increment financing plans therefor (the "TIF Plans"). (b) Subject to the approval of the City Council following a public hearing, the Authority has adopted a spending plan for the TIF Districts in accordance with Minnesota Statutes, Section 469.176 Subd. 4n in the form submitted to the City Council by the Authority (the "Spending Plan") to utilize existing tax increment revenues from the TIF Districts in order to stimulate construction or substantial rehabilitation of private development in a way that will also create or retain jobs. (c) The City and Authority have performed all actions required by law to be performed prior to the approval of the Spending Plan, including, but not limited to, causing notice of a public hearing to be published and holding a public hearing on the date hereof on the adoption of the Spending Plan. Section 2. Approval of the Spending Plan and Program Policy. (a) The Spending Plan for the TIF Districts, is hereby approved. (b) The Authority is hereby authorized to carry out the terms of the Spending Plan in such manner as it determines to be consistent with the Spending Plan. Dated: September 21, 2021 Adopted: _________________________________ Mayor ATTEST: _______________________________ City Manager MEMORANDUM TO: Kersten Elverum – Director of Planning and Development FROM: Stacie Kvilvang - Ehlers DATE: September 21, 2021 SUBJECT: Public Hearing on TIF Spending Plan The State Legislature amended the TIF law (the “Law”) in 2021 to provide flexibility to cities to utilize unobligated TIF balances in their districts to promote construction and job creation in their communities. Dollars expended under the Law do not count against the pooling limitations of the districts, which for the City/HRA’s applicable districts, is 25% of the TIF collected over their respective terms. The law allows HRA’s/EDA’s/cities to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities if it will create or retain jobs in this state, including construction jobs. In addition, they can make an equity or similar investment in a corporation, partnership, or limited liability company that they determine it is necessary to make construction of private development happen. The City’s HRA has until December 31, 2022 to transfer the funds to another designated City/HRA fund, and the dollars must be expended by December 31, 2025. Any unused TIF dollars must be returned to the applicable TIF district after this date. In order to implement this provision of the Law, the City and HRA are required to develop a Spending Plan (the “Plan”) that identifies the TIF districts that will fund the projects and describe the projects to be assisted. In addition, the City is required to hold a public hearing on the Plan and if approved, staff will provide a copy to the Office of the State Auditor as required by the Law. The HRA has dollars available under the Plan for projects in TIF Districts 1-2, 2-9 and 2-11. The City/HRA are currently working with two (2) developers on redevelopment sites in the City where construction of their projects require assistance, and they would meet the above referenced timeline for expenditure of the funds. Trilogy’s proposed three-phase apartment and commercial development located at 1009 Hill Street and 8594 and 8490 Excelsior Boulevard requested assistance for demolition and environmental remediation. The HRA agreed to provide $685,000 for Phase I (which will be provided under the Plan) and agreed to review future requests for Phases II and III. In addition, Alatus is developing the site at 325 Blake road and has requested TIF assistance for public improvements, site preparation, underground parking, affordable housing and other development costs related to construction of the residential and commercial uses. Once an actual TIF application is filed with the HRA by Alatus, the HRA may use dollars under the Plan to reduce the amount of TIF required under the new TIF District, thus potentially reducing the number of years of the TIF Note(s). Please contact me at 651-697-8506 with any questions. HRA Adoption Date: September 21, 2021 CITY Adoption Date: September 21, 2021 Hopkins Housing and Redevelopment Authority City of Hopkins, Hennepin County, Minnesota SPENDING PLAN TIF District 1-2 (Entertainment District) TIF District 2-9 (Oaks of Main) TIF District 2-11 (Super Valu) BUILDING COMMUNITIES. IT’S WHAT WE DO. Prepared by: Ehlers 3060 Centre Pointe Drive Roseville, Minnesota 55113 SPENDING PLAN FOR TIF DISTRICTS 1-2 (ENTERTAINMENT DISTRICT), 2-9 (OAKS OF MAIN), AND 2-11 (SUPER VALUE) I. PURPOSE The Hopkins Housing and Redevelopment Authority (the “Authority”) administers the Tax Increment Financing Districts listed above (the “TIF Districts”) in the City of Hopkins, Minnesota (the “City”), and proposes to adopt a Spending Plan for the TIF Districts in accordance with Minnesota Statutes, Section 469.176 Subd. 4n (the “Act”). The purpose of the Spending Plan is to develop or redevelop sites, lands or areas within the City in conformity with the City’s Comprehensive Plan or other City plans or objectives by using available tax increments from the TIF Districts to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities, which will create or retain jobs in this state, including construction jobs. II. PLAN The Authority is authorized as follows: (a) To use available tax increments from the TIF Districts to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities (the "Projects") in financing assistance to further the goals in the City’s Comprehensive Plan or other City plans or objectives, if doing so will create or retain jobs in the state, including construction jobs. Preference for financing assistance will be for environmental remediation, demolition, soil corrections and site preparation for Trilogy’s proposed three-phase apartment and commercial development located at 1009 Hill Street and 8594 and 8490 Excelsior Boulevard and for public improvements, site preparation, underground parking, affordable housing and other development costs related to construction of residential and commercial uses at 325 Blake Road. The Projects shall commence before December 31, 2025 (unless a later commencement date is authorized by law) and shall constitute Projects that would not commence by such date without the assistance provided pursuant to this Spending Plan. (b) To amend the budget set forth in the Tax Increment Financing Plans for the TIF Districts as necessary to provide for the assistance authorized by this Spending Plan. (c) To take any other action necessary and authorized under the Act in connection with the construction or substantial rehabilitation of facilities of the type described in clause (a) above. The assistance provided pursuant to this Plan shall be subject to Minnesota Statutes, Sections 116J.993 to 116J.995 (the “Business Subsidy Law”), if applicable, and shall be subject to the City’s Business Subsidy Policy.