CR 96-135 PH - Tax Incriment 2-9September 3, 1996
Proaosed Action
P K
PUBLIC HEARING ON TAX INCREMENT DISTRICT 2 -9
THE OAKS OF MAINSTREET PROJECT
Staff recommends approval of the following, subject to staff conditions:
Adoption of Resolution 96 =67, modifying Redevelopment Project No. 1 • establishing Tax Increment
Financing District No 2 -9: modifying Tax Increment Financing District No. 1 -1: modifying Tax
Increment Financing District 2-1 and modifying Tax Increment Financing District No. 2 -4• and
approving and adoptingthe modified Redevelopment Plan and Tax Increment Financing Plans relating
thereto. subject to staff conditions
Overview
In 1990, the City approved creation of Tax Increment District 2-4, which encompasses the Pines Mobile
Home Park. The purpose of creating this district was to facilitate a redevelopment of this area.
Although a few projects were discussed, unfortunately none of them moved forward.
Real Estate Equities is now proposing to construct a townhouse project, The Oaks of Mainstreet. Tax
increment is being requested in order to facilitate the development. The development agreement that
was executed with Real Estate Equities states that the HRA will provide tax increment to the project
and will undertake a process to facilitate creation of a new tax increment district.
The HRA has previously taken action on the adoption of the tax increment plan creating 2 -9 and other
related documents, as detailed in Resolution 96-67. It needs to be noted that the City Council is under
no obligation to approve the tax increment plan at the hearing, even though it has already been
approved by the BRA.
Primary Issues to Consider
o What are the specifics of the tax increment plan?
o Notification of other taxing jurisdictions.
o Other issues
o What are the staff conditions?
o Future action.
Suanortine Documents
Council Report 96 -135
o Resolution 96 -67
o Document modifying the Redevelopment Plan for Redevelopment Project No. 1
and Tax Increment Financing Districts 1 -1, 2 -1, 2-4 and the Tax Increment Financing Plan for
Tax Increment Financing District 2 -9
Jame D. Kerrie
Planning & Economic De elopment Director
Council Report 96 -135, September 3, 1996 - Page 2
Primary Issues to Consider
Based on the recommended action, the Council has the following issues to consider:
o What are the specifics of the tax increment plan?
TIF District 2 -9 is a redevelopment tax increment district. This type of district allows the
City to capture increments for up to a 25 -year period.
• TIF District 2 -9 will encompass only the property of the Pines Mobile Home Park.
The final assessed value of the project will be determined following completion of the
project. The assessed value will determine the specific amount of TIF generated and, in
turn, the number of years to repay outstanding bonded indebtedness.
The modification to the finance plan for TIF Districts 1 -1 and 2 -1 will allow the HRA to
utilize tax increments if so desired to facilitate the improvements in 2 -9. This action does
not obligate the City nor HRA to use these increments for this purpose.
The existing TIF District 2 -4 would be terminated with the creation of TIF District 2 -9.
Notification of other taxing jurisdictions.
Both Hennepin County and School District 270 were provided notification concerning the
district and the upcoming hearing. No response has been received from either group.
Other Issues.
In conjunction with Council action on this matter, the following needs to be considered:
• The new tax increment district would be certified with Hennepin County only if the sale of
bonds is approved and the project moves forward.
As an alternative to the LGA/HACA penalty, the City will need to provide a 5 percent
non -tax increment local contribution to the project. The increased revenue from the 10
percent administrative fee should alleviate this 5 percent impact.
o What are the staff conditions?
Approval of the subject action would be conditioned upon the following:
• Submission of all documents as required in the development agreement dated August 7,
1996, in a form acceptable to the HRA and City.
• Approval by the City Council and HRA for the sale of the various bond issues to facilitate
the project.
Council Report 96 -135, September 3, 1996 - Page 3
o Future action.
With approval of the subject action, the City Council and HRA will need to approve the
various bond documents to facilitate a sale. Also, the final tax in ewent application and site
plan will need to be approved.
As part of any approval on the above items, all of the documents required by the
development agreement will need to be prepared in an acceptable format. This will include
executed relocation agreements with all the tenants of the Pines Mobile Home Park.
Alternatives
The HRA has the following alternatives regarding this matter:
1. Approve the action as recommended by staff.
2. Continue for additional information. With this action, the Council needs to detail additional
information as required to make a decision on this matter.
follows:
Section 1. Recitals.
N:\ W PDATAV 3OPKINSTIF2- 9,CCIT'COUN.RES
RESOLUTION NO. 96 - 67
CITY OF HOPKINS
COUNTY OF HENNEPIN
STATE OF MINNESOTA
RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT
PROJECT NO. 1, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 2-9,
MODIFYING TAX INCREMENT FINANCING DISTRICT NO. 1-1, MODIFYING TAX
INCREMENT FINANCING DISTRICT NO. 2-1, AND MODIFYING TAX INCREMENT
FINANCING DISTRICT NO. 2 -4, AND APPROVING AND ADOPTING THE TAX
INCREMENT FINANCING PLANS RELATED THERETO, LOCATED WITHIN
REDEVELOPMENT PROJECT NO. 1 .
BE IT RESOLVED by the City Council (the "Council ") of the City of Hopkins, Minnesota (the "City"), as
1.01. It has been proposed that the City modify the Redevelopment Plan for Redevelopment Project No.
1, establish Tax Increment Financing District No. 2 -9, modify Tax Increment Financing District No. 1 -1, modify Tax
Increment Financing District No. 2 -1, and modify Tax Increment Financing District No. 2 -4, and approve and adopt
the Tax Increment Financing Plans relating thereto, located within Redevelopment Project No. 1, all pursuant to and
in accordance with Minnesota Statutes, Sections 469.001 through 469.047, inclusive; and Minnesota Statutes,
Sections 469.174 through 469.179, inclusive; and
1.02. The Council has investigated the facts and has caused to be prepared a Modified Redevelopment Plan
for Redevelopment Project No. 1, the proposed Tax Increment Financing Plan for Tax Increment Financing District
No. 2 -9, a modified Tax Increment Financing Plan for Tax Increment Financing District No. 1 -1, a modified Tax
Increment Financing Plan for Tax Increment Financing District No. 2 -1, and a modified Tax Increment Financing
Plan for Tax Increment Financing District No. 2-4 (the "Plans ")
1.03. The City has performed all actions required by law to be performed prior to the modification of
Redevelopment Project No. 1, the establishment of Tax Increment Financing District No. 2 -9, the modification of
Tax Increment Financing District No. 1 -1, the modification of Tax Increment Financing District No. 2 -1, and the
modification of Tax Increment Financing District No. 2-4, and the adoption of the Plans relating thereto, including,
but not limited to, notification of Hennepin County and School District No. 270 having taxing jurisdiction over the
property to be included in Tax Increment Financing District No. 2 -9, Tax Increment Financing District No. 1 -1, Tax
Increment Financing District No. 2 -1, and Tax Increment Financing District No. 2 -4, a review by the City Planning
Commission of the proposed Plans and the holding of a public hearing upon published notice as required by law.
Section 2. Findings for the Modification of the Redevelopment Plan for Redevelopment Project No.
1, the Establishment of Tax Increment Financing District No. 2 -9, the Modification of Tax
Increment Financing District No. 1 -1, the Modification of Tax Increment Financing District
No. 2 -1, and the Modification of Tax Increment Financing District No. 2 -4, and the
Approval of the Tax Increment Financing Plans relating thereto.
2.01. The Council hereby finds that Tax Increment Financing District No. 2 -9 is a redevelopment district.
2.02. The Council hereby finds that the modification of the Redevelopment Plan for Redevelopment
Project No. 1, the establishment of Tax Increment Financing District No. 2 -9, the modification of Tax Increment
Financing District No. 1 -1, the modification of Tax Increment Financing District 2 -1, and the modification of Tax
Increment Financing District 2 -4, and the approval of the Tax Increment Financing Plans relating thereto, are
intended and, in the judgement of this Council, the effect of such actions will be, to provide an impetus for
redevelopment consistent with the public purposes and objectives specified in the Plans.
2.03. The Council further finds that the proposed development, in the opinion of the Council, 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 plan and, therefore, the use
of tax increment financing is deemed necessary; that the Plans conform to the general plan for the development or
redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound
needs of the City as a whole, for the development of Tax Increment Financing District No. 2 -9 by private enterprise.
2.04. The Council further finds, declares and determines that the City has made the findings based on the
reasons and supporting facts set forth in Attachment A attached hereto, and in the Plans.
2.05 The City elects to make a qualifying local contribution in accordance with Minnesota Statutes,
Section 273.1399 Subd. 6(d), and therefore anticipates that the Tax Increment Financing District will be exempt from
state aid Loss.
Section 3. Approval of the Plans.
3.01. The modifications to the Redevelopment Plan for Redevelopment Project No. 1, the establishment
of the Tax Increment Financing Plan for Tax Increment Financing District No. 2 -9, the modification of the Tax
Increment Financing Plan for Tax Increment Financing District No. 1 -1, the modification of the Tax Increment
Financing Plan for Tax Increment Financing District No. 2 -1, and the modification of the Tax Increment Financing
Plan for Tax Increment Financing District No. 2 are hereby approved and adopted, and shall be placed on file in
the office of the City Manager.
3.02 Tax Increment Financing District No. 2 -4 is hereby decertified. The parcel to be included within
Tax Increment Financing District No. 2 -9 shall be deleted from Tax Increment Financing District No. 2 -4.
N:1 WPDATABOPKINSITIF2 .9\CITYCOUN.RES
ATTEST:
3.03. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with
the implementation of the Plans and for this purposed to negotiate, draft, prepare and present to this Council for its
consideration all further plans, resolutions, documents and contracts necessary for this purpose.
The motion for the adoption of the foregoing resolution was duly seconded by Council member
, and upon a vote being taken thereon, the following voted in favor thereof:
and the following voted against the same:
Dated: September _, 1996
(Seal)
Clerk
N INSITIF2- 9
Mayor
•
ATTACHMENT A
RESOLUTION #96 -67
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plans for Tax
Increment Financing Districts Nos. 2 -9, 1 -1, 2 -1, and 2-4 as required pursuant to Minnesota Statutes, Section 469.175,
Subdivision 3 are as follows:
1. Finding that Tax Increment Financing District No. 2 -9 is a redevelopment district as defined in Minnesota Statutes,
Section 469.175, Subd. 10.
District No. 2 -9 consists of 1 parcel of land and adjacent and internal rights -of -way The District qualifies as a
redevelopment district as defined in Minnesota Statutes, section 469.174, subd. 10, based on the findings as found in
Exhibit C in the Tax Increment Financing Plan for Tax Increment Financing District No. 2 -9.
Tax Increment Financing District No. 1 -1, Tax Increment Financing District No. 2 -1 and Tax Increment Financing
District No. 2 -4 are existing tax increment financing districts. The modifications to Tax Increment Financing Districts
Nos. 1 -1 and 2 -1 involve changes in the project budgets and clarification of project activities. The modification to Tax
Increment Financing District No. 2 -4 involves decertifying the District. The modifications do not change the
qualification under the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through 469.179.
2. Finding that the proposed development, in the opinion of the Council, 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 plan.
Due to the high cost of redevelopment on parcels currently occupied by substandard buildings and the cost of financing
the proposed improvements, the projects contemplated in the Plans are feasible only through assistance, in part, from
tax increment financing. This analysis is based on city and staff analysis of property within the districts.
A comparative analysis of estimated market values both with and without establishment of Tax Increment Financing
District No. 2 -9 and the use of tax increments has been performed as described above. Such analysis is contained in
Appendix C of the Tax Increment Financing Plan for Tax Increment Financing District No. 2 -9 and indicates that the
increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated
market value of the site absent the establishment of Tax Increment Financing District No. 2 -9 and the use of tax
increments (See Appendix C).
3. Finding that the Tax Increment Financing Plans conform to the general plan for the development or redevelopment
of the municipality as a whole.
The site is appropriately zoned. The Tax Increment Financing Plans for Tax Increment Financing District No. 2 -9, Tax
Increment Financing District No. 1 -1, Tax Increment Financing District No. 2 -1, and Tax Increment Financing District
No. 24 have been reviewed by the Planning Commission and been found to conform to the general development plan
of the City.
4. Finding that the Tax Increment Financing Plans will afford maximum opportunity, consistent with the sound needs
of the City as a whole, for the development of Redevelopment Project No. 1 by private enterprise.
The establishment of Tax Increment Financing District No. 2 -9 and the modifications of Tax Increment Financing
Districts Nos. 1 -1, 2 -1 and 2 -4 will result in the facilitation of development and redevelopment in the City by private
enterprise. Without the assistance that will be made available as a result of the actions being taken by the City, private
enterprise has not, and in the opinion of the Council, would not undertake the redevelopment of Tax Increment Financing
District No. 2 -9.
N:: AWPD ATAUIOPKIN51TIF2- 91CITYCOUN.REs