CR 93-71 Development Project Increment District
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Council Report 93-71
April 30, 1993
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DEVELOPMENT PROJECT/TAX INCREMENT DISTRICT
THERMOTECH PROPERTY
Proposed Action.
staff recommends adoption of the following motion: Authorize staff to
prepare a Tax Increment Financing.Plan 2-7 for' a portion of the Thermotech
property and set public hearing date for June 15.
.
This action will allow staff to undertake the necessary steps to prepare a
plan for establishment of a tax increment district on this propertr.
Overview
The city council recently approved a resolution petitioning the Nine Mile
Creek Watershed District Board to establish lower 100 year flood elevations
for a portion of Nine Mile Creek within Hopkins. The purpose of
undertaking these improvements are basically two-fold.
o To reduce potential flooding problems within the Nine Mile Creek
Watershed flood plain.
o Lower the flood Plain elevation on the Thermotech property in
order to provide them the ability to expand their existing
building.
The costs
basically
.
of undertaking necessary improvements along Nine Mile Creek are
as follows:
o
o
Public costs
Private costs (Thermotech property)
$500,000 to $670,000
$120,000 to $350,000
It is anticipated that the City of Hopkins would be able to recover a
percentage of the cost of the public improvements for this project from the
Watershed District. However, based on discussions between city staff and
the Watershed District it appears that the City would have to fund the
project up front and wait to fit into the Watershed District funding cycle.
Also, it appears that the City would probably not be able to recover all of
the costs associated with these improvements. Finally, the Watershed
District would not provide any funding of improvements on the Thermotech
property.
The action presently being proposed is to authorize staff to prepare a plan
to place the Thermotech property within a tax increment district. At such
time as they would construct their new building, tax increments generated
from this development would be used to pay all or a portion of the public
flood plain improvement cost. Also there is the possibility of providing
some assistance to Thermotech to assist in construction of the culvert
improvements on this site.
Primary Issues to Consider
o What are the implications of this action?
o What would be the specifics of the tax increment plan?
proposed district
^
r'ga , Planning & Economic Development Director
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CR 93-71
Development Project/Tax Increment District
Thermotech Property
Page 2
primary Issues to Consider
o What are the implications of this action?
With approval of the action as requested by staff the fOllowing would
take place:
A tax increment plan would be prepared which included the
Thermotech property.
Zoning and Planning Commission would be requested to review the
plan as relates to its conformance with the comprehensive Plan at
their May meeting.
The HRA would need to hold a special meeting on June 15 to
consider action on the tax increment plan.
The City council would hold a public hearing on June 15 to
consider action on the tax increment plan.
As noted above, the tax increment plan would need to be reviewed and
approved by the city Council at a future date prior to any actual
certification to the County.
.
o What would be the specifics of the tax increment plan?
The tax increment district as proposed is anticipated to be either a
soil corrections district or economic development district. Based on
one of these two alternatives the city would have the ability to
collect increments for an 8 to 12 time period.
The specific boundaries of the. district would include the Thermotech
manufacturing facility on Fifth street South.
The plan would identify that the tax increments generated from this
district would be used to finance public and possibly private
improvements to Nine Mile Creek in order to facilitate development on
the Thermotech property.
Alternatives
The City Council has the following alternatives regarding this issue:
1. Approve the action as requested. Approval of this action will
allow staff to prepare the plan and schedule the public hearing.
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CR 93-71
Development project/Tax Increment District
ThermotechProperty
Page 3
2. Continue for additional information. City Council has this
option. staff has a concern as relates to this alternative.
There is presently action being considered by the state
Legislature which could severely restrict the establishment and
use of tax increments. If approved, these restrictions could
become effective as soon as July 1.
3. Do not approve the action as requested by staff. If the Council
wishes to pursue this alternative staff will need to explore
other funding alternatives in the financing of the Nine Mile
Creek improvements.
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