CR 06-037 Public Hearing-Modify TIF Dist 1-3 & Establish TIF Dist 1-4
CITY Of:
March 22, 2006
m
Council Report 2006-037
HOPKINS
PUBLIC HEARING - MODIFY TIF DlST 1-3 AND ESTABLISH TIF DlST 1-4
Proposed Action
Staff recommends approval of the following motion: adopt Resolution 2006-022. modifying the
redevelopment plan for Redevelopment Proiect No. I and modifying the Tax Increment Financing Plan
for Tax Increment Financing District 1-3 and establishing Tax Incerment Financing District 1-4.
Overview
The HRNCity Council is being requested to approve the following:
· Modify the existing TlF District 1-3 by removing property presently in the district between
Sixth and Eighth Avenues.
· Establish TlF District 1-4 to include properties removed from T1F District 1-3 as described
above.
Property within TlF districts 1-3 and 1-4 will be used to facilitate a redevelopment effort for mixed-use
retaiVresidential projects as follows:
· TlF District 1-3, GPS Development is proposing a project with approximately 220 condo units
and 1,600 feet of commercial space.
· TlF District 1-4, The Cornerstone Group is proposing a project with approximately 53 condo
units, nine townhomes, and 4,600 feet of commercial space.
The establishment of the district does not obligate the City or HRA to provide tax increment
assistance.
The Planning Commission approved a resolution on May 31,2005, with a finding that Tax Increment
District 1-3 is in conformance with the City's Comprehensive Plan. The Commission again took
action on March 28, 2006, with the same finding for TlF District 1-4.
The City Council, acting as the HRA, will need to take action on the establishment of the District.
This is scheduled for a special meeting on April18, 2006, after the regular City Council meeting.
Supportinl! Documents
. Resolution 2006-022
· Modification to Redevelopment Plan for Redevelopment Project No. I and the modification of
Tax Increment Financing District 1-3 and the establishment of Tax Increment Financing
District 1-4
. Zoning PI
Financial Impact: $ 0 N/A _ Budgeted: YIN _ Source:
Related Documents (CIP, ERP, etc.):
Notes:
CITY OF HOPKINS
HENNEPIN COUNTY
STATE OF MINNESOTA
Council member
introduced the following resolution and moved its adoption:
RESOLUTION NO. 2006-022
RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO.1, A MODIFICATION TO THE TAX INCREMENT
FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-3 AND
ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-4 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 (the "Board") of the Housing and Redevelopment Authority In and
For the City of Hopkins (the "HRA") has heretofore established Redevelopment Project No. I and adopted the
Redevelopment Plan therefor. It has been proposed by the HRA and the City that the City adopt a Modification to the
Redevelopment Plan for Redevelopment Project No. I (the "Redevelopment Plan Modification") and a Modification
to the Tax Increment Financing Plan for Tax Increment Financing District No. 1-3 (the "TIP Plan Modification") and
establish Tax Increment Financing District No. 1-4 (the "District") and adopt a Tax Increment Financing Plan (the
"TIF Plan") therefor (the Redevelopment Plan Modification, the TIF Plan Modification and the TIP Plan are referred
to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota
Statutes, Sections 469.00 I to 469.047 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as
reflected in the Plans, and presented for the Council's consideration.
1.02. The HRA and City have investigated the facts relating to the Plans and have caused the Plans 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 Plans, including, but not limited to,
notification of Hennepin County and Independent School District No. 270 having taxingjurisdiction over the property
to be included in the District, a review of and written comment on the Plans by the City Planning Commission,
approval of the Plans by the HRA on April 18, 2006, and the holding ofa public hearing upon published notice as
required by law.
1.04. Certain written reports including, the TIF application, Report ofInspection Procedures and Results
for Determining Qualifications of a Tax Increment Financing District As a Redevelopment District, Hopkins Block
64, Tax Increment Financing District dated June 9, 2005 and updated for purposes of the creation of the District,
Block 64 Redevelopment Relocation Plan by Wilson Development Services dated January, 2005, Market Analysis
Hopkins Main Street Residential Campus byGPS Financial Group dated March 2005, (the "Reports") relating to the
Plans 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 Plans. The Reports 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. I, but made certain specific
findings at the time of the creation of Tax Increment Financing District No. 1-3 concerning the conditions within the
area ofthe Project that are within the boundaries of Tax Increment Financing District No. 1-3 and the District, which
findings are hereby reaffirmed.
Section 2.
Findings for the Adoption and Approval of the Modification of Tax Increment Financing District
No. 1-3
2.01. The Council hereby finds that parcel numbers 24117 22 42 0029, 2411722420030,241172242
0031,24 117 22 42 0032, 24 117 22 42 0033, 24 11722420048,24 11722420049,24 11722420050,24 11722
420056,24 11722420057,2411722420167,2411722420169 (the "parcels") should be eliminated from TIF
District No. 1-3 and included in TIF District No. 1-4.
2.02. The elimination of the above-referenced parcel constitutes the TIP Plan Modification for TIP District
No. 1-3, and staff is directed to maintain a copy ofthis resolution with the records for TIF District No. 1-3.
2.03. The Council hereby reaffirms the original findings for TIF District No. 1-3, established as a
"redevelopment district".
Section 3.
Findings for the Adoption of the Redevelopment Plan Modification
3.01. The Council hereby fmds that the Modification to the Redevelopment Plan for Redevelopment
Project Area No. I consists of the Modification to the TIP Plan forTIF District No. 1-3 and the establishment ofTIF
DistrictNo 1-4.
3.02. The Council hereby finds that the modification to the Redevelopment Plan for Redevelopment
Project Area No. I conforms to the general plan for the development of the City as a whole and represents a
continuation of the goals and objectives set forth in the Redevelopment Plan for Redevelopment Project Area No. I.
Section 4.
Findings for the Establishment of Tax Increment Financing District No. 1-4
4.0 I. 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)(I).
4.02. 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
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 or
redevelopment of the District by private enterprise.
4.03. 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.
4.04. The Council and HRA elect to calculate fiscal disparities for the District in accordance with
Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be
taken from inside the District.
Section 5.
Public Puroose
5.01. The adoption ofthe Plans conforms in all respects to the requirements of the Act and will help fulfill
a need to redevelop an area of the City which is already built up, to remove, prevent and reduce blight, blighting
factors and the causes of blight, to prepare the area for redevelopment in accordance with the Redevelopment Plan, to
provide employment opportunities, to improve the tax base and to improve the general economy of the State and
thereby serves a public purpose. The assistance to be provided pursuant to the Plans serves primarily a public
purpose for the reasons set forth in Exhibit A.
Section 6.
Approval and Adoption of the Plans
6.01. The Plans, 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 City Clerk.
6.02. 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 to negotiate, draft, prepare and present to this Council for its consideration all
further plans, resolutions, documents and contracts necessary for this purpose.
6.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the District, as
described in the Plans, 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.
6.04. The City Clerk is further authorized and directed to file a copy of the Plans with the Commissioner of
the Minnesota Department of Revenue pursuant to Minnesota Statutes 469.17 5, Subd. 4a.
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: April 18, 2006
ATTEST:
Mayor
City Clerk
(Seal)
EXHIBIT A
RESOLUTION NO.
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for
Tax Increment Financing District No. 1-4 (District), as required pursuant to Minnesota Statutes, Section 469.175,
Subdivision 3 are as follows:
1. Finding that Tax Increment Financing District No. 1-4 is a redevelopment district as defined in MS., Section
469.174, Subd. IO(a)(I).
The District consists of 12 parcels, with plans to redevelop the area for housing and commercial purposes. At
least 70 percent ofthe area of the parcels in 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 F of the TIP Plan.) It has further been determined that these conditions are reasonably
distributed through the District. These findings and the conclusion that the District qualifies under the
statutory criteria and formulas for a redevelopment tax increment financing district are further described in
the "Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment
Financing District As a Redevelopment District, Hopkins Block 64, Tax Increment Financing District," dated
June 9,2005, prepared by LHB, Inc. and updated for purposes of creating the District (and appendices).
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 incrementsfor the maximum duration of
Tax Increment Financing District No. 1-4 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: The proposed development consists of
the construction of a mixed use condominium, townhouse and retail development consisting of approximately
52 condominiums, 9 townhouses and 5300 square feet of retail/commercial space. The proposed
development will clean up blighted sites and remove substandard buildings in the City's downtown area and
continue with the redevelopment of the area. City staff and consultants have reviewed the estimated
redevelopment costs for the development which include acquisition, demolition, infrastructure improvements,
site preparation and environmental remediation and the available methods of financing. The developer was
asked for and provided a letter and a proforma as justification that the developer would not have gone
forward without tax increment assistance. (See attachment in Appendix G of the TIP Plan.) Due to the high
cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount of
commercial and for sale housing property for expansion adjacent to the existing project, the incompatible
land uses at close proximity, and the cost of financing the proposed improvements, this project is feasible
only through assistance, in part, from tax increment financing.
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 TIF District permitted by the Plan: This finding is justified on the grounds that the cost of site and public
improvements and utilities add to the total redevelopment cost. Historically, site and public improvements
costs in this area have made redevelopment infeasible without tax increment assistance. At the current time,
the site has an estimated $1,312,700 in land acquisition, demolition and remediation costs. In addition, the
site requires substantial other site preparation activities to prepare it for development. Finally, the
development requires the expenditure of substantial sums for the construction of parking to serve the owners
of the housing units. These costs result in a cost per unit for land that exceeds the amount acceptable under
current or foreseeable market conditions. The tax increment is needed to reduce these costs to a point where
the housing units will be marketable. Therefore, 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. Attached in Exhibit G of the TIP Plan is a proforma which shows that in order to make the
project financially feasible, $2,900,000 in TIF is needed to offset the high cost of land acquisition, site
preparation and parking. The Development Agreement is anticipated to contain a look-back provision to
ensure that projected profits match the actual results.
A comparative analysis of estimated market values both with and without establishment of the District and
the use of tax increments has been performed as described above. If all development which is proposed to be
assisted with tax increment were to occur in the District, the total increase in market value would be up to
$14,713,000. The present value oftax increments from the District is estimated to be $ 3,220,954. It is the
Council's finding that no development with a market value of greater than $ 11,492,046 would occur without
tax increment assistance in this district within 25 years. This finding is based upon evidence from general
past experience with the high cost of acquisition and public improvements in the general area ofthe District.
(See Cashflow in Appendix D ofthe TIF Plan.)
3. Finding that the Tax Increment Financing Planfor Tax Increment Financing District No. 1-4 conforms to
the general plan for the development or redevelopment of the municipality as a whole.
The Planning Commission reviewed the TIP Plan and found that the TIF Plan conforms to the general
development plan ofthe City.
4. Finding that the Tax Increment Financing Planfor Tax Increment Financing District No. 1-4 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.
The project to be assisted by the TIF District will result in increased employment in the City and the State of
Minnesota, the redevelopment of substandard properties, increased tax base of the State and add a high
quality development to the City. Through the implementation of the TIF Plan, the HRA and City will also
increase the availability of safe and decent life-cycle housing in the City.
5. Finding that the expenditure of tax increment serves a primarily public purpose.
The private benefit that would be enjoyed by the developer if it is able to proceed with the proposed
development is the provision of tax increment financing in an estimated principal amount of$2,900,000 (net
present value).
However, the Council finds that this "private benefit" is necessary for the City and HRA to accept in order to
achieve the many public benefits which implementation of the development will provide. Those public
benefits substantially outweigh any "private benefit." It is unlikely that redevelopment of the District would
occur without public assistance. At the time that the Council approved creation of Tax Increment Financing
District No. 1-3, the Council made numerous findings of public benefit that would result from the
developments proposed within that tax increment financing district. The Council hereby reaffirms those
findings of public benefit as they relate to the property to be included in the District and to the proposed
development of the District. Therefore, the Council continues to find that the public expenditures to be
expended pursuant to the proposed District in implementing the contemplated development would be
primarily for public benefit and that any private benefits would be merely incidental.
6. Finding concerning modification of the Redevelopment Plan for Project No.1.
At the time that the Council approved creation of Tax Increment Financing District No. 1-3, the Council
made findings concerning the modification of the Redevelopment Plan for Redevelopment Project No. I,
which findings are hereby reaffirmed with respect to the current modification of the Redevelopment Plan.
CITY OF HOPKINS
COUNTY OF HENNEPIN
RESOLUTION RZ06-7
RESOLUTION OF THE HOPKINS PLANNING COMMISSION FINDING
THAT THE MODIFICATION TO THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO.1 AND THE MODIFICATION TAX
INCREMENT FINANCING PLAN FOR TAX INCREMENT DISTRICT 1-
3 AND THE ESTABLISHMENT OF TAX INCREMENT FINANCING
DISTRICT 1-4 CONFORM TO THE GENERAL PLAN FOR THE
DEVELOPMENT AND REDEVELOPMENT OF THE CITY.
WHEREAS, the City Council for the City of Hopkins, Minnesota (the "City"), has proposed
to adopt a modification to the Redevelopment Plan for Redevelopment Project No. I and
modification to the tax increment financing plan for Tax Increment Financing District 1-3 and the
establishment of Tax Increment Financing District 1-4 (collectively, the "Plan") and has submitted
the Plan to the Hopkins Planning Commission (the "Commission"), pursuant to Minnesota Statutes,
Section 469.175, Subdivision 3; and
WHEREAS, the Commission has reviewed the Plan to determine its conformity with the
general plans for the development and redevelopment of the City as described in the Comprehensive
Plan for the City.
NOW, THEREFORE, BE IT RESOLVED by the Commission that the Plan conforms with
the general plans for the development and redevelopment of the City as a whole.
Adopted this 28th day of March 2006.
ATTEST:
(j}L_~
Peter Sholtz, Chair
Draft as of April 12, 200t5 .
MODIFICATION TO THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO.1
and the
MODIFICATION TO THE TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO. 1-3
and the
establishment of
TAX INCREMENT FINANCING DISTRICT NO. 1-4
(a redevelopment district)
both within
REDEVELOPMENT PROJECT NO.1
HOPKINS HOUSING AND REDEVELOP:MENT AUTHORlTY
CITY OF HOPKINS
HENNEPIN COUNTY
STATE OF MINNESOTA
Public Hearing: April 18, 2006
Adopted:
. I ~A~O~'~E~'~
Prepared by: EHLERS & ASSOCIATES. INC.
3060 Centre Pointe Drive. Roseville. Minnesota 55113-1105
651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
TABLE OF CONTENTS
(for reference purposes only)
SECTION I - MODIFICATION TO THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO.1.... . . . . . . ... ........... ..... ...... 1-1
Foreword ............................................................. 1-1
A. Plan History ......................................................... 1-1
B. Definitions .......................................................... 1-1
C. Statement of Need and Public Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1-1
D. Statutory Authority .................................................... 1-2
E. Project Boundaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1-2
F. Property Acquisition ................................................... 1-3
G. Redevelopment Project Financing .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1-3
SECTION 11- MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 1-3 . . . " . . . . . . . . . . . . . . . . . . . . . . ., 2-1
SECTION 111- TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO. 1-4 ........................ 3-1
Subsection 3-1. Foreword.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3-1
Subsection 3-2. Statutory Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3-1
Subsection 3-3. Statement of Objectives ................................... 3-1
Subsection 3-4. Redevelopment Plan Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 3-1
Subsection 3-5. Description of Property in the District and Property To Be Acquired . 3-2
Subsection 3-6. Classification of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3-2
Subsection 3-7. Duration of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 3-4
Subsection 3-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Valueflncrement and Notification of Prior Planned Improvements. . . . . . . . . . . . . . ., 3-4
Subsection 3-9. Sources of RevenuefBonded Indebtedness .................... 3-5
Subsection 3-10. Uses of Funds. . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .. 3-6
Subsection 3-11. Fiscal Disparities Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3-6
Subsection 3-12. Business Subsidies. . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . .. . . . . ., 3-7
Subsection 3-13. County Road Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3-8
Subsection 3-14. Estimated Impact on Other Taxing Jurisdictions. . . . . . . . . . . . . . . .. 3-8
Subsection 3-15. Supporting Documentation ................................ 3-10
Subsection 3-16. Definition of Tax Increment Revenues ....................... 3-10
Subsection 3-17. Modifications to the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3-10
Subsection 3-18. Administrative Expenses................... . . . . . ..... ..... 3-11
Subsection 3-19. Limitation of Increment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3-12
Subsection 3-20. Use ofTax Increment .................................... 3-12
Subsection 3-21. Excess Increments ...................................... 3-13
Subsection 3-22. Requirements for Agreements with the Developer. . . . . . . . . . . . .. 3-13
Subsection 3-23. Assessment Agreements ................................. 3-13
Subsection 3-24. Administration of the District. ............... . . . . ..... . ..... 3-14
Subsection 3-25. Annual Disclosure Requirements ........................... 3-14
Subsection 3-26. Reasonable Expectations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 3-14
Subsection 3-27. Other Limitations on the Use of Tax Increment. . . . . . . . . . . . . . . .. 3-14
Subsection 3-28. Summary.............................................. 3-15
APPENDIX A
PROJECT DESCRIPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. A-1
APPENDIX B
MAP(S) OF REDEVELOPMENT PROJECT NO.1 AND THE DISTRICT .... . . . . . . ., B-1
APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT. . . . . . . . . . . ., C-1
APPENDIX D
ESTIMATED CASH FLOW FOR THE DISTRICT .............................. D-1
APPENDIX E
MINNESOTA BUSINESS ASSISTANCE FORM ............................... E-1
APPENDIX F
REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT .................... F-1
APPENDIX G
BUT/FOR QUALIFICATIONS.. .. . . ...... . . ........ . ......... . . . .., .... .... G-1
SECTION 1- MODIFICATION TO THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO.1
Foreword
The foUowing text represents a Modification to the Redevelopment Plan for Redevelopment Project No.1.
This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan
for Redevelopment Project No. I. Generally, the substantive changes include the establishment of Tax
Increment Financing District No. 1-4.
For further information, a review of the Redevelopment Plan for Redevelopment Project No. 1 is
recommended. It is available from the City Clerk at the City of Hopkins. Other relevant information is
contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within
Redevelopment Project No.1.
In addition the Redevelopment Plan for Redevelopment Project No.1 is hereby amended and supplemented
as follows:
A. Plan History
Redevelopment Project No. I was originally created in 1971 as a federal urban renewal area. Redevelopment
Project No.1 was subsequently modified numerous times. In 1989 the Housing and Redevelopment
Authority In and For the City of Hopkins (the "HRA") and the City of Hopkins (the "City") caused to be
prepared a Reorganization and Modification of Redevelopment Projects and Tax Increment Financing
Districts dated November 7, 1989, which was approved by the City and the HRA (the "1989 Modification").
The 1989 Modification contains a statement of the history of Redevelopment Project No. I and the
Redevelopment Plan. The Redevelopment Plan for Redevelopment Project No.1 was modified several times
after the 1989 Modification in connection with the creation or modification of tax increment financing
districts located within Redevelopment Project No.1.
B. Definitions
Unless specificaUy defined in this Modification, aU capitalized terms shall have the meaning given to such
terms in the 1989 Modification.
C. Statement of Need and Public Purpose
A. The HRA reaffirms the statements of need and public purpose contained in the
Redevelopment Plan for RedevelopmentProject No. I, and all modifications thereto. The HRA further seeks
to achieve the foUowing goals and objectives:
1. Acquire substandard or blighted areas and other real property for the purpose of removing,
preventing or reducing blight, blighting factors or the causes of blight;
2. Clear any areas acquired and instaU, construct or reconstruct streets, utilities and site
improvements essential to the preparation of the sites for redevelopment;
3. Provide a sufficient supply of adequate, safe and sanitary dwellings;
4. Protect the health, safety, morals and welfare of the citizens of the City;
Hopkms HRA
Modification to the Redevelopment Plan for Redevelopment Project No 1
1-1
5. Encourage related development and redevelopment in order to protect and improve the tax
base and general economic vitality of the City, and
6. Assure that the long term housing needs of the City are met.
B. The HRA hereby reaffirms all findings contained in the Redevelopment Plan for
Redevelopment Project No. I, all amendments thereto, and all resolutions of the HRA or City approving the
same and specifically finds for Redevelopment Project No. I that:
\. The land within the area of Redevelopment Project No. 1 would not be available for
redevelopment without the financial aid to be sought under this Redevelopment Plan and corresponding
documents, including the Tax Increment Plan for Tax Increment Financing District No. 1-4;
2. The Redevelopment Plan for RedevelopmentProjectNo. I will afford maximum opportunity,
consistent with the needs of the City as a whole, for the development of Redevelopment Project No. I by
private enterprise; and
3. The Redevelopment Plan for Redevelopment Project No. I conforms to the general plan for
the development of the City as a whole.
C. TheHRAreaffirms its fmdingthatRedevelopmentProjectNo. I is a "redevelopment project"
within the meaning of Minnesota Statutes, Section 469.002 subd. 14, of the BRA Act.
The factual basis for the above finding includes:
1. The HRA relies on the various studies, surveys and planning documents prepared in
connection with the creation of Redevelopment Project No. I to the extent that subsequent development
activities have not cured the conditions that allowed designation of Redevelopment Project No. I as a
"redevelopment project. II
2. In May of2005 LBB, Inc. ("LHB ") conducted a study of building conditions in the portion
ofthe area of Redevelopment Project No. I proposed to be included in Tax Increment Financing District No.
1-4. That study determined that a substantial percentage of the buildings in that portion of the area of
Redevelopment Project No. I are structurally substandard as defined in Minnesota Statutes, Section 469.174,
subd. 10. Such findings and other evidence on file with the HRA support the conclusion that said portion of
the area of Redevelopment Project No. I is a "blighted area" within the meaning of Section 469.002,
subdivision II of the BRA Act. Data from the LHB study are on file with the Authority. These study results
will also be used when considering the establislunent of Tax Increment Financing District No. 1-4. That
study was updated in March of2006.
D. Statutory Authority
The HRA is authorized under the BRA Act to undertake and administer Redevelopment Project No. I, and
to fmance Public Redevelopment Costs through issuance of bonds secured by Redevelopment Project No.
1 revenues.
E. Project Boundaries
The boundaries of Redevelopment Project No. I are described in the existing Redevelopment Plan for
Redevelopment Project No. I and modifications thereto and are not being changed by this Modification.
Hopkins HRA
Modification to the Redevelopment Plan for Redevelopment Project No. I
1-2
F. Property Acquisition
The Authority may acquire any property within the area of Redevelopment Project No.1, or interests therein,
as the Authority may deem necessary or desirable to carry out the objectives of the Redevelopment Plan for
Redevelopment Project No. I. Acquisition may be accomplished by negotiation or by the exercise of the
Authority's powers of eminent domain.
The Authority currently anticipates, and fmds a need to acquire, the parcels including but not limited to the
following in order to carry out this Redevelopment Plan:
24 117 22 42 0029
2411722420030
24 11722 42 0031
24 11722 42 0032
24 117 22 42 0033
24 117 22 42 0048
24 117 22 42 0049
24 117 22 42 OOSO
24 117 22 42 0056
24 117 22 42 0057
24 11722 42 0167
24 117 22 42 0169
6 6th Ave N
611 Main street
U nassi ned
U nassi ned
621 Main street
Unassi ned
701 Main street
U nassi ned
19 Ei hili Ave. N.
21 8th Ave. N.
Unassi ned
Unassi ned
G. Redevelopment Project Financing
The HRA may establish one or more TIP Districts in Redevelopment Project No. I to finance Public
Redevelopment Costs. The HRA may also use any other revenues available to the HRA to pay such costs,
including without limitation grant funds, property tax abatements through the City under Minnesota Statutes,
Sections 469.1812 to 469.1815, and proceeds ofa special tax, ifany, levied under Section 469.033 of the
HRA Act.
Hopkins HRA.
Modification to the Redevelopment Plan for Redevelopment Project No.1
1-3
SECTION 11- MODIFICA TION TO THE TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 1-3
Description of Property in the District
(AS MODIFIED ON APRIL 18, 2006)
Tax Increment Financing District No. 1-3, a redevelopment TIF District was adopted July 26, 2005. The
District is being modified to remove 12 parcels, therefore reducing the size of District No. 1-3.
The parcels to be removed from District No. 1-3 are as follows:
24 11722420029
24 117 22 42 0030
2411722420031
24 117 22 42 0032
24 117 22 42 0033
24 117 22 42 0048
24 117 22 42 0049
24 117 22 42 0050
24 11722 42 0056
24 11722 42 0057
2411722420167
2411722420169
66thAveN
611 Main street
Unassi ned
Unassi ned
621 Main street
Unassi ned
701 Main street
Unassi ned
19 Ei hth Ave. N.
21 8th Ave. N.
Unassi ned
Unassi ned
Hopkins HRA
Modification to the Tax Increment Financing Plan for Tax Increment Financmg District No. 1-3
2-]
SECTION 11/ - TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO. 1.4
Subsection 3-1. Foreword
The Hopkins Housing and Redevelopment Authority (the "HRA"), the City of Hopkins (the "City"), staff and
consultants have prepared the following information to expedite the establishment of Tax Increment
Financing District No. 1-4 (the "District"), a redevelopment tax increment financing district, located in
Redevelopment Project No. I.
Subsection 3-2. Statutory Authority
Within the City, there exists areas where public involvement is necessary to cause development or
redevelopmentto occur. To this end, the HRA and City have certain statutory powers pursuantto Minnesota
Statutes ("MS.'~, Sections 469.001 to 469.047, inclusive, as amended, and MS., Sections 469.174 to
469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing
public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for Tax Increment Financing District
No. 1-4. Other relevant information is contained in the Modification to the Redevelopment Plan for
Redevelopment Project No.1.
Subsection 3-3. Statement of Objectives
The District currently consists of 12 parcels ofland and adjacent and internal rights-of-way. The District is
being created to facilitate the redevelopment of a portion of the downtown area and construct a mixed-use
commercial and housing development in the City of Hopkins. Please see Appendix A for further project
information. A contract for this has been entered into with Marketplace and Main, LLC. Phase I of the
development is likely to begin in the Fall of 2006. This TIF Plan is expected to achieve many of the
objectives outlined in the Redevelopment Plan for Redevelopment Project No. I.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude
the undertaking of other qualified development or redevelopment activities. These activities are anticipated
to occur over the life of Redevelopment Project No. I and the District.
Subsection 3-4. Redevelopment Plan Overview
I. Property to be Acquired - Selected property located within the District may be acquired by
the HRA or City and is further described in this TIF Plan.
2. Relocation - Relocation services, to the extent required by law, are available pursuant to
MS., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the HRA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. TheHRA or City may perform or provide for some or all necessary acquisition, construction,
relocation, demolition, and required utilities and public street work within the District.
Hopkins HRA
Tax Increment Financing Plan for Tax Increment Financing District No. 1-4
3-1
Subsection 3.5. Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed in Appendix C. See the map in Appendix B for further information on the location of the
District.
The BRA or City may acquire any parcel within the District including interior and adjacent street rights of
way. Any properties identified for acquisition will be acquired by the HRA or City only in order to
accomplish one or more of the following: storm sewer improvements; provide land for needed public streets,
utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to
accomplish the uses and objectives set forth in this plan. The HRA or City may acquire property by gift,
dedication, condenmationor direct purchase from willing sellers in order to achieve the objectives ofthis TIF
Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition
and related costs.
Subsection 3-6. Classification of the District
The HRA and City, in determining the need to create a tax increment financing district in accordance with
MS., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a
redevelopment district pursuant to MS. Section 469.174- Subd. 1 O( a) (1) as defined below:
(a) "Redevelopment district"means a type of tax incrementfinancing district consisting of a project,
or portions of a project, within which the authority finds by resolution that one or more of the
following conditions, reasonably distributed throughout the district, exists:
(1) parcels consisting of70 percent of the area in 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-ol-way;
(3) tankfacilities, or property whose immediately previous use wasfor tankfacilities, as defined
in Section 115C, Subd. 15, if the tank facility:
(m) have or had a capacity of more than one million gallons;
(iv) are located adjacent to railfacilities; or
(v) have been removed, or are unused, underused, inappropriately used or infrequently
used; or
(4) a qualifYing disaster area, as defined in Subd. lab.
(b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in
structural elements or a combination of deficiencies in essential utilities andfacilities, light and
ventilation, fire protection including adequate egress, layout and condition of interior partitions,
or similar factors, which dejects or deficiencies are of sufficient total significonce to justifY
substantial renovation or clearance.
Hopkins HRA
Tax Increment Fmancing Plan for Tax Increment Flnancmg District No. 1.4
3-2
(c) A building is not structurally substandard ifit 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 miry 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. The municipality miry not make such a determination without
an interior inspection of rhe property, but need not have an independent, expert appraisal
prepared of the cost of repair and rehabilitation of the building. 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.
(d) A parcel is deemed to be occupied by a structurally substandard buildingfor purposes of the
finding under paragraph (a) if all of the following conditions are met:
(1) the parcel was occupied by a substandard building within three years of the filing of the
request for certification of the parcel as part of the district with the county auditor;
(2) the substandard building was demolished or removed by the authority or the demolition or
removal was financed by the authority or was done by a developer under a development
agreement with the authority;
(3) the authority found by resolution before the demolition or removal that the parcel was
occupied by a structurally substandard building and that after demolition and clearance the
authority intended to include the parcel within a district; and
(4) upon filing the request for certification of the tax capacity of the parcel as part of a district,
the authority notifies the county auditor that the original tax capacity of the parcel must be
adjusted as provided by f 469.177, subdivision 1, paragraph (f).
(e) 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.
(f) For districts consisting of two or more noncontiguous areas, each area must qualify as a
redevelopment district under paragraph (a) to be included in the district, and the entire area of
the district must satisfy paragraph (a).
In meeting the statutory criteria the HRA and City rely on the following facts and findings:
The District is a redevelopment district consisting of 12 parcel(s).
An inventory shows that parcels consisting of more than 70 percent of the area in the District are
occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures.
. An inspection of the buildings located within the District finds that more than 50 percent of the buildings
are structurally substandard as defined in the TIF Act. (See Appendix F).
Hopkins HRA
Tax Increment Financing Plan for Tax Increment Financing District No. 1-4
J-J
Pursuant toMS., Sections 469.176 Subd. 7, the District does not contain any parcel or part ofa parcel that
qualified under the provisions of MS., Sections 273.111 or 273.112 or Chapter 473Hfor taxes payable in
any of the five calendar years before the filing of the request for certification of the District.
Subsection 3-7. Duration of the District
Pursuant to MS., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must
be indicated within the TIF Plan. Pursuant to MS., Section 469.176, Subd. 1 b, the duration of the District
will be 25 years after receipt of the first increment by the BRA or City (a total of26 years oftax increment).
The date of receipt by the City of the first tax increment is expected to be 2008. Thus, it is estimated that the
District, including any modifications ofthe TIF Plan for subsequent phases or other changes, would terminate
after 2033, or when the TIF Plan is satisfied, whichever occurs first. If increment is received in 2007, the
term of the District will be 2032. The HRA or City reserves the right to decertifY the District prior to the
legally required date.
Subsection 3.8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements
PursuanttoMS., Section 469.174, Subd. 7 and MS., Section 469. 177, Subd. 1, the Original NetTax Capacity
(ONTe) as certified for the District will be based on the market values placed on the property by the assessor
in 2005 for taxes payable 2006.
Pursuant to MS., Section 469.177, Subds. 1 and 2, the County Auditor shall certifY in each year (beginning
in the payment year 2008) the amount by which the original value has increased or decreased as a result of:
I. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries of the district;
3. Change due to adjustments, negotiated or court-ordered abatements;
4. Change in the use of the property and classification;
5. Change in state law governing class rates; or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no
value will be captured and no tax increment will be payable to the HRA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2006, assuming the
request for certification is made before June 30, 2006. The ONTC and the Original Local Tax Rate for the
District appear in the table on the following page.
Pursuant to MS., Section 469.174 Subd. 4 and MS., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTe) of the District, within Redevelopment Project No. I, upon completion of
the project, will annually approximate tax increment revenues as shown in the table on the following page.
The BRA and City request 100 percent of the available increase in tax capacity for repayment of its
obligations and current expenditures, beginning in the tax year payable 2008. The Project Tax Capacity
(PTC) listed is an estimate of values when the project is completed.
Hopkins HRA
Tax Increment Financing Plan for Tax Increment Financing District NQ, 1-4
3-4
Project Estimated Tax Capacity upon Completion (pTC)*
Original Estimated Net Tax Capacity (ONTC)
Estimated Captured Tax Capacity (CTC)
Original Local Tax Rate
Estimated Annnal Tax Increment (CTC x Local Tax Rate)
Percent Retained by the BRA
$169,749
$19,227
$150,522
1.20134 est. Pay 2006
$180,828
100%
'The tax capacity is the estimated tax capacity for 2008. The cashflow incorporates the Phasing for each project and
an inflation rate, which will result in higher CTC in future years.
Pursuant to MS., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval ofthe
TIF Plan by the municipality pursuantto MS., Section 469.175, Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City of Hopkins bas reviewed the area to be included in the District and determined that no
building permits have been issued during the 18 months immediately preceding approval of the TIF
Plan by the City.
Subsection 3-9. Sources of RevenuelBonded Indebtedness
Public improvement costs, acquisition, relocation, utilities, parking facilities, streets and sidewalks, and site
preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual
collection of tax increments. The HRA or City reserves tbe right to use other sources of revenue legally
applicable to the HRA or City and the TIF Plan, including, but not limited to, special assessments, general
property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other
contributions from the developer and investment income, to pay for the estimated public costs.
The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result ofthe TIF
Plan. As presently proposed, the project will be fmanced by a combination of a bond issue, a pay-as-you-go
note, and an interfund loan or transfer. Additional indebtedness may be required to fmance other authorized
activities. The total principal amount of bonded indebtedness, including a general obligation (GO) TIF bond,
or other indebtedness related to the use oftax increment financing will not exceed $9,500,000 without a
modification to the TIF Plan pursuant to applicable statutory requirements. Jt is estimated that $9,500,000
in bonded indebtedness will be financed with tax increment revenues.
This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur
other debt only upon the determination that such action is in the best interest of the HRA or City, as the case
may be. The HRA or City may also finance the activities to be undertaken pursuant to the TIF Plan through
loans from funds of the HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible
costs paid for by a developer.
The estimated sources of funds for the District are contained in the table below.
Hopkms HRA
Tax Increment Financing Plan for Tax Increment Financing District No. ]-4
3-5
SOURCES OF FUNDS
TOTAL
$9,500,000
$9,500.000
Tax Increment
PROJECT REVENUES
Subsection 3-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate the redevelopment of a portion of the
downtown area and construct a mixed-use commercial and housing development in the City of Hopkins. The
HRA and City have determined that it will be necessary to provide assistance to the project for certain costs.
The HRA has studied the feasibility of the development or redevelopment of properly in and around the
District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan
authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate
of public costs and uses of funds associated with the District is outlined in the following table.
PROJECT COSTS TOTAL
TOTAL
$2,000,000
$550,000
$2,000,000
$4,000,000
$950,000
$9,500,000
USES OF FUNDS
Land/Building Acquisition
Demo and Remediation
Site Improvements/Preparation
Interest
Administrative Costs (up to 10%)
It is estimated that the cost of improvements, including administrative expenses which will be paid or
financed with tax increments, will equal $9,500,000 as is presented in the budget above.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant
to MS., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by properly within the
District will be spent on activities related to development or redevelopment outside of the District but within
the boundaries of Redevelopment Project No. I, (including administrative costs, which are considered to be
spent outside of the District) subject to the limitations as described in this TlF Plan.
Subsection 3-11. Fiscal Disparities Election
Pursuantto MS., Section 469.177, Subd 3, the HRA or City may elect one of two methods to calculate fiscal
disparities. If the calculations pursuant to MS., Section 469.177, Subd. 3, clause b, (within the District) are
followed, the following method of computation shall apply:
(1) The original net tax capacity shall be determined before the appiication of the fiscal disparity
provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal
disparity commercial-industrial net tax capacity increase between the original year and the
current year multipiied by the fiscal disparity ratio determined pursuant to MS., Section
276A.06, subdivision 7 or MS., Section 473F.08, subdivision 6. Where the original net tax
capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity
Hopkins HRA
Tax Increment Fmancing Plan for Tax Increment Financing District No I ~4
3-6
and no tax increment determination. Where the original tax capacity is less than the current tax
capacity, the difference between the original net tax capacity and the current net tax capacity
is the captured net tax capacity. This amount less any portion thereofwhich the authority has
designated, in its tax increment financing plan, to share with the local taxing districts is the
retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate
to the retained captured net tax capacity of the authority is the tax increment of the authority.
The BRA will choose to calculate fiscal disparities by M.S., Section 469.177, SubtL 3, clause b.
According to MS., Section 469.177, Subd. 3:
(c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or
(b) shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Subsection 3-12. Business Subsidies
Pursuant to MS. Sections 116J993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(I) A business subsidy ofless than $25,000;
(2) Assistance that is generally available to all businesses or to a general class of similar businesses, such
as a line of business, size, location, or similar general criteria;
(3) Public improvements to buildings or lands owned by the state or local govemmentthat serve a public
purpose and do not principally benefit a single business or defined group of businesses at the time
the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in MS., Section 116J552, Subd. 3;
(5) Assistance provided for the sole purpose ofrenovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that the
assistance is equal to or less than 50% of the total cost;
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under MS., Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers' compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 50 I (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
Hopkins HRA
Tax Increment Financing Plan fOf Tax Increment Financing District No. I ~4
3-7
(16) Assistance for a tax increment financing soils condition district as defined under MS., Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes ofa principally
technical nature.
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of$75,000 or less; and
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration.
The HRA will comply with MS., Section 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
Subsection 3-13. County Road Costs
Pursuant to MS., Section 469.175, Subd. la, the county board may require the HRA or City to pay for all or
part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgement ofthe county, substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the HRA or City within forty-
five days of receipt of this TIF Plan. The HRA and City are aware that the county could claim that tax
increment should be used for county roads, even after the public hearing.
Subsection 3-14. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation ofthe District. However, the HRA or City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows if the "but for" test was not met:
IMPACT ON TAX BASE
Hennepin County
City of Hopkins
ISD No. 270
Est 2005/2006
Total Net
Tax CaDacitv
1,229,870,954
88,255,570
15,623,635
Estimated Captured
Tax Capacity (CTC)
UDon Comoletion
150,522
150,522
150,522
Percent ofCTC
to Entitv Total
0.0122%
0.1706%
0.9634%
Hopkins HRA
Tax Increment Financmg Plan for Tax Increment Fmancing District No. 1-4
3-8
IMPACT ON TAX RATES
Est 2005/2006 Percent Potential
Extension Rates of Total CTC Taxes
Hennepin County 0.409880 34.12% 150,522 61,696
City of Hopkins 0.493900 41.11% 150,522 74,343
ISD No. 270 0.215250 17.92% 150,522 32,400
Other 0.082310 6.85% 150.522 12.389
Total 1.201340 100.00% 180,828
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the estimated 2005/Pay 2006 rate. The total net capacity for the entities listed above
are based on estimated Pay 2006 figures. The District will be certified under the actual2005/Pay 2006 rates,
which were unavailable at the time this TIF Plan was prepared.
Pursuant to MS. Section 469.175 Subd. 2(b):
(I) It is estimated that the total amount of tax incrementthat will be generated over the life ofthe District
is $9,500,000;
(2) The probable impact of the District on police protection is not expected to be significant.
The probable impact of the District on fire protection is not expected to be significant. Typically new
buildings generate few calls, if any, and are of superior construction. The existing building, which
will be eliminated by the new development, has public safety concems that include issues such as
access, defects in structural elements, deficiencies in essential facilities, such as fire protection and
adequate egress. The levels of deficiencies in the existing building justify substantial renovation or
clearance. Thus, the impact of the District's new building on fire protection will not be increased.
The impact of the District on public infrastructure is expected to be minimal. The current
infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume
generated from the proposed development. Based on the development plans, additional costs,
including street maintenance, sweeping, plowing, lighting and sidewalks are minimal because no
new roads are being constructed and some are being vacated.
The probable impact of borrowing costs is expected to be minimal. It is not anticipated that there will
be any general obligation debt issued in relation to this project, therefore there will be no impact on
the City's ability to issue future debt or on the City's debt limit.
(3) It is estimated that the amount of tax increments over the life of the District that would be attributable
to school district levies, assuming the school district's share of the total local tax rate for all taxing
jurisdictions remained the same is $842,400;
(4) It is estimated that the amount of tax increments over the life ofthe District that would be attributable
to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions
remained the same is $1,604,096;
Hopkins HRA
Tax Increment Financmg Plan for Tax Increment Financmg District No. 1.4
3-9
(5) No requests for additional information from the county or school district regarding the proposed
development for the District were received.
Subsection 3-15. Supporting Documentation
Pursuant to MS. Section 469.175 Subd 1, clause 7 the TIP Plan must contain identification and description
of studies and analyses used to make the determination set forth in MS. Section 469.175 Subd 3, clause (2)
and the findings are required in the resolution approving the TIF district. Following is a list of reports and
studies on file at the City that support the Authority's findings:
TIF application
Redevelopment and Blight Analysis by LHB dated May 2005
. Block 64 Redevelopment Relocation Plan by Wilson Development Services dated January, 2005
Market Analysis Hopkins Main Street Residential Campus by GPS Financial Group dated March
2005
Subsection 3-16.
Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
I. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed
under MS., Section 469.177;
2. The proceeds from the sale or lease of property, tangible or intangible, purchased by the
Authority with tax increments;
3. Principal and interest received on loans or other advances made by the Authority with tax
increments; and
4. Interest or other investment earnings on or from tax increments.
Subsection 3-17.
Modifications to the District
In accordance with MS., Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of Redevelopment Project No. I or the
District, if the reduction does not meet the requirements of MS., Section 469.175, Subd. 4(e);
2. Increase in amount of bonded indebtedness to be incurred;
3. A determination to capitalize interest on debt if that determination was not a part of the
original TIF Plan, or to increase or decrease the amount of interest on the debt to be
capitalized;
4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City;
5. Increase in the estimate of the cost ofthe project, including administrative expenses, that will
be paid or financed with tax increment from the District; or
6. Designation of additional property to be acquired by the HRA or City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIF Plan.
Pursuant toMS Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not
be enlarged after five years following the date of certification ofthe original net tax capacity by the county
auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that
Hopkins HRA
Tax. Increment Financing Plan for Tax Increment Financing District No. 1-4
).10
the addition to the district meets the criteria of MS., Section 469.174, Subd. 10, paragraph (a), clauses (I) to
(5), must be documented in writing and retained. The requirements of this paragraph do not apply if(l) the
only modification is elimination of parcel(s) from Redevelopment Project No. I or the District and (2) (A)
the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity
of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstandingMS.,
Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax
capacity of the parcel(s) eliminated from the District.
The HRA or City must notil)! the County Auditor of any modification that reduces or enlarges the geographic
area of Redevelopment Project No. I or the District. Modifications to the District in the form of a budget
modification or an expansion of the boundaries will be recorded in the TIF Plan.
Subsection 3.18. Administrative Expenses
In accordance with MS., Section 469.174, Subd 14, administrative expenses means all expenditures of the
HRA or City, other than:
I. Amounts paid for the purchase of land;
2. Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
project;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
project; or
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to MS., Section 469.178; or
5. Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses (I) to (3).
For districts for which the request for certification were made before August I, 1979, or after June 30, 1982,
administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants,
and planning or economic development consultants. Pursuant to MS., Section 469.176, Subd. 3, tax
increment may be used to pay any authorized and documented administrative expenses for the District up
to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan
or the total tax increments, as defined by MS., Section 469.174, Subd. 25, clause (1), from the District,
whichever is less.
Pursuant to MS., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District. The county may require payment ofthose
expenses by February 15 of the year following the year the expenses were incurred.
Pursuant to MS., Section 469. 177, Subd 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount
deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor
for the cost of financial reporting of tax increment financing information and the cost of examining and
auditing authorities' use of tax increment financing. This amount may be adjusted annually by the
Commissioner of Revenue.
Hopkins HRA
Tax Increment Financmg Plan for Tax Increment Financing Distnct No 1-4
3-11
Subsection 3-19. Limitation of Increment
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated ifsufficientfunds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Pursuant to MS., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax increment
financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of
property or other site preparation, including qualified improvement of a street adjacent to a parcel
but not installation of utility service including sewer or water systems, has been commenced on a
parcel located within a tax increment financing district by the authority or by the owner of the parcel
in accordance with the tax increment financing plan, no additional tax increment may be taken from
that parcel and the original net tax capacity of that parcel shall be excluded from the original net
tax capacity of the tax increment financing district. If the authority or the owner of the parcel
subsequently commences demolition, rehabilitation or renovation or other site preparation on that
parcel including qualified improvement of a street adjacent to that parcel, in accordance with the
tax increment financing plan, the authority shall certify to the county auditor that the activity has
commenced and the county auditor shall certify the net tax capacity thereof as most recently certified
by the commissioner of revenue and add it to the original net tax capacity of the tax increment
financing district. The county auditor must enforce the provisions of this subdivision. The authority
must submit to the county auditor evidence that the required activity has taken place for each parcel
in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following
the year in which the parcel was certified as included in the district. For purposes of this subdivision,
qualified improvements of a street are limited to (1) construction or opening of a new street, (2)
relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street.
The City or a property owner must improve parcels within the District by approximately April, 20 I 0 and
report such actions to the County Auditor.
Subsection 3-20. Use of Tax Increment
The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable
property located in the District for the following purposes:
1. To pay the principal of and interest on bonds issued to finance a project;
2. To finance, or otherwise pay public redevelopment costs of Redevelopment Project No. I pursuant
to the MS., Sections 469.001 to 469.047;
3. To pay for project costs as identified in the budget set forth in the TIF Plan;
4. To finance, or otherwise pay for other purposes as provided inMS., Section 469.176, Subd. 4;
5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the
HRA or City or for the benefit of Redevelopment Project No. I by a developer;
6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
MS., Chapter 462C. MS., Sections 469.152 through 469.165, and/or MS., Sections 469.178; and
7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to MS., Chapter 462C, MS., Sections 469.152
through 469.165, and/or M.S., Sections 469.178.
Hopkins HRA
Tax Increment Financing Plan for Tax Increment Financing District No 1-4
3-]2
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by MS., Section 469.176, Subd. 4.
Tax increments generated in tbe District will be paid by Hennepin County to the HRA for the Tax Increment
Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an
amount as specified in a developer's agreement to reimburse the costs of land acquisition, public
improvements, demolition and relocation, site preparation, and administration. Remaining increment funds
will be used for HRA or City administration (up to 10 percent) and the costs of public improvement activities
outside the District.
Subsection 3-21. Excess Increments
Excess increments, as defined inMS., Section 469.176, Subd 2, shall be used only to do one or more of the
following:
1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment for any outstanding bonds;
3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
In addition, the HRA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan
in order to finance additional public costs in Redevelopment Project No. I or the District.
Subsection 3-22. Requirements for Agreements with the Developer
The HRA or City will review any proposal for private development to determine its conformance with the
Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the
development with City plans and ordinances. The HRA or City may also use the Agreements to address other
issues related to the development.
Pursuant to MS., Section 469.176, Subd 5, no more than 25 percent, by acreage, of the property to be
acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result
of acquisition with the proceeds of bonds issued pursuant to MS., Section 469.178 to which tax increments
from property acquired is pledged, unless prior to acquisition in excess of25 percent ofthe acreage, the HRA
or City concluded an agreement for the development or redevelopment of the property acquired and which
provides recourse for the HRA or City should the development or redevelopment not be completed.
Subsection 3-23. Assessment Agreements
Pursuant to MS., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement
in recordable form with the developer of property within the District which establishes a minimum market
value of the land and completed improvements for the duration of the District. The assessment agreement
shall be presented to the County Assessor who shall review the plans and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon which the improvements are
to be constructed and, so long as the minimum market value contained in the assessment agreement appears,
Hopkins HRA
Tax Increment Financing Plan for Tax Increment Financing District No 1-4
J-13
in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the
minimum market value agreement.
Subsection 3-24. Administration of the District
Administration of the District will be handled by the City Clerk.
Subsection 3-25. Annual Disclosure Requirements
Pursuant to MS., Section 469.175, Subd. 5, 6, and 6b the HRA or City must undertake financial reporting
for all tax increment fmancing districts to the Office ofthe State Auditor, County Board, County Auditor and
School Board on or before August I of each year. MS., Section 469.175, Subd. 5 also provides that an annual
statement shall be published in a newspaper of general circulation in the City on or before August IS.
If the City tails to make a disclosure or submit a report containing the information required by MS., Section
469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax
increment from the District.
Subsection 3-26. Reasonable Expectations
As required by the TIF Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value ofthe 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 TIF Plan. In making said
determination, reliance has been placed upon written representations made by the developer to such effects
and upon HRA and City staff awareness of the feasibility of developing the project site. A comparative
analysis of estimated market values both with and without establishment of the District and the use of tax
increments has been performed as described above. Such analysis is included with the cashflow in Appendix
D, 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 the District and the
use of tax increments.
Subsection 3-27. Other Limitations on the Use of Tax Increment
I. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the
Redevelopment Project No. I pursuant to the MS., Sections 469.001 to 469.047. Tax increments may
not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition,
construction, renovation, operation, or maintenance of a building to be used primarily and regularly for
conducting the business of a municipality, county, school district, or any other local unit of government
or the state or federal government. This provision does not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking structure.
2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on
activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance
activities within said district orto pay, or secure payment of, debt service on credit enhanced bonds. Not
more than 25 percent of said tax increments may be expended, through a development fund or otherwise,
on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced
Hopkins HRA
Tax Increment Financing Plan for Tax Increment Financing District No. 1-4
3-14
bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they
were solely for activities outside ofthe District.
3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall
be deemed to have satisfied the 75 percent test set forth in paragraph (2) above only if the five year rule
set forth in MS., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year
following certification of the District, 75 percent of said tax increments that remain after expenditures
permitted under said five year rule must be used only to pay previously committed expenditures or credit
enhanced bonds as more fully set forth in MS., Section 469.1763, Subd. 5.
4. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a
redevelopment district must be used to finance the cost of correcting conditions that allow designation
of redevelopment and renewal and renovation districts under M.S., Section 469.176 Subd. 4j. These costs
include, but are not limited to, acquiring properties containing structurally substandard buildings or
improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary
to provide a site of sufficient size to permit development, demolition and rehabilitation of structures,
clearing of the land, the removal of hazardous substances or remediation necessary for development of
the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated
administrative expenses ofthe HRA or City, including the cost of preparation of the development action
response plan, may be included in the qualifying costs.
Subsection 3-28.
Summary
The Hopkins Housing and Redevelopment Authority is establishing the District to preserve and enhance the
tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for
the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota
55113, telephone (651) 697-8500.
Hopkins HRA
Tax Increment Financmg Plan for Tax Increment Financing District No.1 M4
3-]5
APPENDIX A
PROJECT DESCRIPTION
Tax Increment Financing District 1-4 is being established to facilitate the redevelopment ofa portion of Main
Street in tbe downtown area of Hopkins.
The tax increment district will contain one project. The project is a mixed-use project proposed by the
Cornerstone Group. It is a continuation oftbe type of project they completed across the street. The project
consists of approximately 60 for sale town homes and condos and 5,000 to 8,000 square feet of retail.
The TIF will be provided by the HRA issuing Revenue Bonds. It is estimated that with normal market value
increases the District will last from 20-26 years. It should be noted tbat the parcels in Tax Increment
Financing District 1-4 were originally certified in Tax Increment Financing District 1-3 and will be decertified
from that district as part of this action.
APPENDIX
A-l
APPENDIX
APPENDIX B
MAP(S) OF REDEVELOPMENT PROJECT NO.1 AND THE DISTRICT
B-I
1-3.
Redevelopment Project No.1
Modified Tax Increment Financing District No.
Tax Increment Financing District No. 1-4
City of Hopkins
Hennepin County, Minnesota
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The shaded area represents
Redevelopment Project No.1
No.
'fax Increment Financing District
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APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below.
24 117 22 42 0029
2411722420030
2411722420031
24 11722 42 0032
2411722420033
24 11722420048
2411722420049
2411722420050
24 11722420056
24 11722420057
2411722420167
2411722420169
66thAveN
611 Main street
Unassi ned
Unassi ned
621 Main street
Unassi ned
701 Main street
Unassi ned
19 Ei hth Ave. N.
21 8th Ave. N.
Unassi ned
Unassi ned
J D Siler and L A Stroessner
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
Luther Co. Ltd. Partnershi
..Please note thatthese parcels are currently being removed from Tax Increment Financing District No. 1-3.
APPENDIX
C-l
APPENDIX D
ESTIMATED CASH FLOW FOR THE DISTRICT
APPENDIX
D-l
41412006
PAGE 1 on
CITY OF HOPKINS - MAIN STREET
Cornerstone
District'
lnflatJonRate
Pay As You Go No!e Rate
Take out Revenue Note Rate
Take out Revenue Nole Covernge
Fiscal Disp Contnbuli01l Rabo
Pooling Assumpbon
Class Rate Assllmptlons
Assumes First Tax lncremem!
Years of Tax Increment
Assumes LaslTaxlncrement
Assumes Note lsstsed
Tax Capacity (extension) Rate-Frozen
Tax CapaCity (Extension) Rate - Current
State Education Rate
Area'NideRate
Amount oftnr:mnentwm vary dependlng upon marketvalue, tax mas, clan rates,
construdlon 5Chltdule, ancl in1lIUon on marht value, /nRafIon on Iu lat.N
cannot~~'"'
BASIC ASSUMPTIONS
PLEASE READ ALL ASSUMP'TlONS
NEWRedevefopmenl Dlslnct 1-4
6,0000%
6.76%
N1A
N1A
264202%
0.00%
15%-2.0%
2008
2.
2033
08101106
1.200000
1.200000
0.511210
1.298630
EST Pay 2006
EST Pay 2006
EST Pay 2006
EST Pay 2006
EST Pay 2006
FROZEN TAX CAPACITY PAYABLE EST Pay 2006
Total Mar\(el Class BeseTax
PID OWner Address Value Ral' C.....acl'"
24.117-22-42-0033 141,000
24-117-22-42-0032 80,000
24.117-22-42-0031 25,000
24-117-22-42.0030 96,000
24-117.22-42-0049 545,000
24-117.22-42.0050 129,000
24-117-22-42.o04I! 231,000
24-117-22-42.0167 67,000
24-117.22-42-0056 70,000
24-117.22-42-01811 57,000
24-117-2:242-0057 126,000
24-117.22-42.0029 250,000
Total 1817,000
eomm.",", 994% 180,601 15%.2.0% 2,662
HOllSlno 9006% 1.636,399 1.00% 16,364
Total 1,817,000 19,226
PROJECT VALUE INFORMA110N
Nurnberof
Development Sq Ft. ToIal cosl Un!. Taxes Per 'folal Mar\(et T'" T'" ~"'"
T'" Un", PerUnll 60 So. Fl-Unlt Taxes Value Rale Ca"a~ffu Assessable
coo,~ 1,022 220,000 51 $2,640 $134,640 11,220,000 1.00% 112,200 2007 2008
Townhllme5 2,365 400,000 9 S5,BBD $52,920 4,410,000 100% 44,100 2007 2008
Re\all 5,518 163.10 5,518 $543 $29.968 900.000 1.5%-2.0% 17250 2007 2008
TOlal 5578 $217528 16530 000 173550
TAXES PAYAbLE
Total City FiSOIS
Development Tax Tax Tax C'~ FisOls State EO
T,;, Caoacltv Caoacitv Ca"'acl'" Taxes Taxes Taxes
Condos 112,200 112,200 0 134,640 0 0
TownhOfnes 44,100 44,100 0 52,920 0 0
Retail 17250 12,693 4,557 15,231 5,918 8,818
To. 173550 168,993 4557 202 791 5,918 8818
l1F PLAN RUN 02-28-2006
-- --
41412008 PAGE 2 of 2
CITY OF HOPKINS ~ MAIN STREET
CORNERSTONE
TAX INCREMENT CASH FLOW
Annual Proloct Minus Fls01s CapllJred Seml-Annual Auditor Admlnlstrnbon Semi-Annual Ending Penod
8ase~l~ To>< Tax CapaCity Tax Capacity Gross Gross PAYMENT DATE
Mlh. Yc Cansel Caoacitv Increment 036% 1000% Increment Mlh. Yc.
1-Feb 2005 19,226 19,226 Present Value Date August 200E 1-Aug 2006
1-Aug 2006 19,226 19,226 0 0 0 0 0 0 1-Feb 2007
1-Feb 2006 19,226 19,226 0 0 0 0 0 0 1-A", 2007
1-Aug 2007 19,226 19,226 0 0 0 0 0 0 1-Feb 2008
1-Feb 2007 19,226 19,226 0 0 0 0 0 0 1-Aug 2008
1-Aug 2008 19,226 173,550 3,801 150,523 90,314 (325) (9,031) 80,957 1-Feb 2009
1-Feb 2008 19,226 173,550 3,801 150,523 90,314 (325) (9,031) 80,957 1-Aug 2009
1-A", 200' 19,226 173,550 3,801 150,523 90,314 (3251 (9,031) 80,957 1-Feb 2010
'-Feb 200' 19,226 182,228 3,801 159,200 95,520 (3MI (9,552) 85,624 '-Aug 2010
1-Aug 2010 19,226 182,228 3,801 159,200 95,520 (3MI (9,552) 85,624 1-Feb 2011
'-Feb 2010 19,226 191,339 3,801 168,312 100,987 (3641 (10,099) 90,525 1-Aug 2011
1-A", 2011 19,226 191,339 3,801 168,312 100,987 (364) (10,099) 90,525 1-Feb 2012
1-Feb 2011 19,226 200,906 3,801 177,878 100,727 (364) (10,673) 95,670 1-Aug 2012
1-Aug 2012 19,226 200,900 3,801 177,878 100,727 (3641 (10,673) 95,670 1-Feb 2013
1-Feb 2012 19,226 210,951 3,801 187,924 112,754 (4061 (11,275) 101,073 1-Aug 2013
1-Aug 2013 19,226 210,951 3,801 187,924 112,754 (4061 (11,275) 101,073 1-Feb 2014
1-Feb 2013 19,226 221,499 3,801 198,471 119,063 (429) (11,9OS) 100,746 1-Aug 2014
1-Aug 2014 19,226 221,499 3,801 198,471 119,083 (429) (11,908) 100,746 1-Feb 2015
1-Feb 2014 19,226 232,574 3,801 209,546 125,728 (453) (12,573) 112,702 1-Aug 2015
1-Aug 2015 19,226 232,574 3,801 209,546 125,728 (453) (12,573) 112,702 1-Feb 2016
1-Feb 2015 19,226 244,202 3,801 221,175 132,705 (478) (13,270) 118,957 1-Aug 2016
1-A", 2016 19,226 244,202 3,801 221,175 132,705 (478) (13,270) 118,957 1-Feb 2017
1-Feb 2016 19,226 256,412 3,801 233,385 140,031 (5041 (14,003) 125,524 1-Aug 2017
1-Aug 2017 19,226 256,412 3,801 233,385 140,031 (504) (14,003) 125,524 1-Feb 2018
1-Feb 2017 19,226 269,233 3,801 246,200 147,723 (532) (14,772) 132,419 1-Aug 2018
1-Aug 2018 19,226 269,233 3,801 246,200 147,723 (532) (14,772) 132,419 1-Feb 2019
1-Feb 2018 19,226 282,695 3,801 259,667 155,800 (561) (15,580) 139,659 1-Aug 2019
1-Aug 2019 19,226 282,695 3,801 259,667 155,800 (561) (15,580) 139,659 1-Feb 2020
1-Feb 2019 19,226 296,829 3,801 273,802 164,281 (591) (16,428) 147,262 1-Aug 2020
1-Aug 2020 19,226 296,829 3,801 273,802 164,281 (591) (16,428) 147,262 1-Feb 2021
1-Feb 2020 19,226 311,671 3,801 288,644 173,186 (623) (17,319) 155,244 1-Aug 2021
1-Aug 2021 19,226 311,671 3,801 288,644 173,186 (623) (17,319) 155,244 1-Feb 2022
1-Feb 2021 19,226 327,254 3,801 304,227 182,536 (657) (18,254) 163,625 1-Aug 2022
1-A", 2022 19,226 327,254 3,801 304,227 182,536 (657) (18,254) 163,625 1-Feb 2023
1-Feb 2022 19,226 343,617 3,801 320,590 192,354 (692) (19,235) 172,426 1-Aug 2023
1-Aug 2023 19,226 343,617 3,801 320,590 192,354 (692) (19,235) 172,426 1-Feb 2024
1-Feb 2023 19,226 360,798 3,801 337,771 202,662 (730) (20,286) 181,667 1-Aug 2024
1-Aug 2024 19,226 380,798 3,801 337,771 202,662 (730) (20,266) 181,667 1-Feb 2025
1.Feb 2024 19,226 378,838 3,801 355,811 213,486 (769) (21,349) 191,369 1-Aug 2025
1-A", 2025 19,226 378,638 3,801 355,811 213,486 (769) (21,349) 191,369 1-Feb 2026
1-Feb 2025 19,226 397,780 3,801 374,752 224,851 (809) (22,485) 201,557 1-Aug 2026
1-Aug 2026 19,226 397,780 3,801 374,752 224,851 (809) (22,485) 201,557 1-Feb 2027
1-Feb 2026 19,226 417,669 3,801 394,641 238,785 {852} (23,678) 212,254 1-Aug 2027
1-Aug 2027 19,226 417,669 3,801 394,641 238,785 (852) (23,678) 212,254 1-Feb 2026
'-Feb 2027 19,226 438,552 3,801 415,525 249,315 (898) (24,931) 223,486 1-Aug 2028
1-Aug 2028 19,226 436,552 3,801 415,525 249,315 (898) (24,931) 223,486 1-Feb 202'
1-Feb 2028 19,226 460,480 3,801 437,452 262,471 (945) (26,247) 235,279 1-Aug 202'
1-Aug 2029 19,226 460,480 3,801 437,452 262,471 (945) (28,247) 235,279 1-Feb 2030
1-Feb 2029 19,226 483,504 3,801 460,476 276,286 (995) (27,629) 247,663 1-Aug 2030
1-Aug 2030 19,226 483,504 3,801 460,476 276,286 (995) (27,629) 247,663 1-Feb 2031
1-Feb 2030 19,226 507,679 3,801 464,652 290,791 (1,047) (29,079) 260,665 1-Aug 2031
1-Aug 2031 19,226 507,679 3,601 464,652 290,791 (1,047) (29,079) 260,665 1-Feb 2032
1-Feb 2031 19,226 533,063 3,801 510,036 306,021 (1,102) (30,602) 274,318 1-Au9 2032
1-Aug 2032 19,226 533,063 3,801 510,036 306,021 (1,102) (30,602) 274,318 1-Feb 2033
1-Feb 2032 19,226 559,716 3,801 536,669 322,013 (1,159) (32,201) 288,653 1-Au9 2033
1-A~~ 2033 19,226 559,716 3,801 536,669 322,013 C':'5,i C32,201i 288,653 1-Feb 2034
TOTALS 9,339,139 (33,621) (933,914) 8,371,604
PRESENT VALUE 3,220,954 (11,595) (322.096) 2,887,263
T1F PLAN RUN 02-28-2006
APPENDIX E
MINNESOTA BUSINESS ASSISTANCE FORM
(MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT)
APPENDIX
E-1
~~nes&ta=
_ Please fill in date agreement signed (same as question 21)
Minnesota Business Assistance Form
. The Minnesota Business Assistance Form (MBAF) online is available at www.deed.state.mn.us/Communitv/subsidiesIMBAFForm.htm
to report each business subsidy (including Job Opportunity Zone (JOBZ) tax exemptions/credit) and [mandaI assistance agreement
signed from Aueust 1. 1999 tltroue/, December 31.2005 unless goals have been achieved and reported on a MBAF per Minn. Stat.
9116J.993 to ~ 116J.995.
. Assistance given to a business located in a JOBZone must report annually until December 31, 2015 even if goals have been achieved.
. The following government agencies must submit a MBAF: 1) any local government/agency that signed a business subsidy agreement
since January 1,2000, or represents a population of mare than 2,500; 2) all state govenunent agencies authorized to provide business
subsidies.
. DEED will contact any local or state government agency that is required to report but has not done so by April!. Business assistance
may not be awarded after June 1 of each year lUltil a report has been submitted.
. Questions? Call (651) 296~0580. Information on where to mail or fax your completed MBAF(s) is on page 7.
Section 1: (Grantor Informationl
1. Name of grantor (funding entity) 2. Name of person completing this fonn
3. Street address 4. City 5. Zip Code
6. County 7. Phone nwnber 8. Fax number 9. E-mail address
] O. Please indicate who in your organization should receive the:MBAF if different from the person in Question 2.
NamerriUe Phone nwnber Street address City Zip Code
1 1. Classification of grantor (Mark one. If grantor ;$ entUy created 12. Has your organization held a pUblic hearing on and adopted
by gov 't agency, please indicate affiliation. For example, a city criteria for awarding business subsidies in compliance with
EDA would check "eN)' government. 'j Minn. Stal ~ 116J.9947 (Mark one.)
o City government 0 Yes, in 2006 (attach criteria)
0 Yes, in 2006 but have not yet adopted criteria
(J County government 0 Yes, prior to 2006
(J Regional government If Yes:
Hearing Date: Year Criteria Submitted:
(J State government
0 No
o Other (please specifY) 0 Other (Please attach exn/analion.)
13. Has your organization signed any agreements to award a business subsidy or financial assistance from August 1, ]999 through
December 31, 2005 unless goals have been achieved and reported in a previously filed MBAF? (Mark one.)
(J Yes (Complete the remainder of the form unless goals have been achieved and o No(StolJ here. go to section 5 on page 4.)
l'evol'led ina nreviousi~flled MBAF Del' Minn. StaL gJJ6J.993 and Jl16J.994.J
SedioD 2: ReciDient Information
14. Name of business or organization 15. Address where business subsidy or fmancial assistance
receiving SUbsidy or financial assistance will be used
Street address City State ZIP Code
16. Does the recipient have a parent corporation? (Mark one.)
0 Yes (Indicate name and address o/parent corporation below. Ifmore than one, indicate ultimate owner.)
0 No
Name of narent cOmoration Street address cjiv State ZIP Code
Minnesota Business Assistance Form (12/9/05)
Page 1 of7
Dept. of Employment and Economic Development
17. Industry of recipient's facility (Mark one.):
D Manufacturing o Services o Finance, Insurance, Real Estate
o Retail Trade o Wholesale Trade l:l Construction D Other I nlease sneciM
18. Did the recipient relocate as a result of signing this agreement? (Mark one)
o Yes (Indicate city and stale of previous address and reason recipient did not complete this project at that address.)
City/State of previous address Reason project not completed at previous address
Indicate total number of employees who ceased to be employed by recipient when the recipient relocated to become eligible for the
business subsidy.
# -
D No IGa ta Ouestlan 19.)
19. What would recipient have done without business subsidy or financial assistance? (Mark one):
o Remain at previous location, but not expand 0 Remain at previous location but expand at the location
Q Relocate to different Minnesota location o Relocated outside Minnesota
D Other
19A. Was the nroiect a result of eminent domain? DYes ONo
Section 3: Ab"reement Information
20. Total dollar value of business subsidy or fmanciaJ assistance 2 J. Date agreement signed (In addition to the agreement dale,
(please separate value by type in Questions 24 and 25.) indicate any dates the agreement was amended.)
(Enter zero for JOHZ, Biozone and Agzone projects.)
22. Benefit date (Indicate the date the recipient receives the business subsidy or improvements were finished, equipment was placed into
service, or the recipiellt occupied the property, whichever is earlier,)
23. Does the agreement provide a business SUbsidy or one of the four types of financial assistance (see Question 25) required
to be reported? (Mark one,)
CJ business subsidv (J financial assistance
24. If the agreement provided a business subsidy, please indicate the 25. If the assistance was one of the four types of financial assistance,
type(s) and total dollar value for each type. please indicate the type(s).
(J not applicable, agreement provided financial assistance Q not applicable, agreement provided a business subsidy
D loan (only principal) $ o assistance for property
D grant (i.e., forgivable loan) $- by contaminants $
(J tax abatement $- Q assistance for renovating building
Q TIP or other tax reduction or deferra1* $- stock or bringing it up to code, and
(J guarantee or payment $- assistance provided for designated
Q contribution of property or infrastructure $- historic preservation districts, when
(J preferential use of governmental facilities $- 50 percent or less of total cost $
Q land contribution $- o assistance for pollution control or
(J Biozone $ 0 abatement $
Q JOBZ (state tax exemptions/credits and sales tax) $----9-- a assistance for a TIF soils
D JOBZ - Agzone $----9-- condition district $
D other (Specify subsidy type.) $-
I (Note: no dollar value for zone nroiects)
26. Ifthe assistance induded tax increment fmancing, please indicate 27. Are any other grantors providing a business subsidy or fmancial
the type ofTIF district? (Mark one.) assistance to the same project? (Mark one.)
CI not applicable, assistance was not in the fann of TIF DYes (Specify each grantor and the value of their assistance below;
attach an additional sheet ifnecessary.
(J redevelopment
Q renewal and renovation
(J soils condition Grantor Value ($)
CJ economic development
Q mined underground space
Q hazardous substance subdistrict Grantor Value ($)
DNo
*For questions about TIF reporting requirements contact Arlin Waelti (651) 296-7676 at the Minnesota Office of the State Auditor.
Minnesota Business Assistance Fonn (1219/05)
Page 2 of7
Dept. of Employment and EconomIC Development
Section JZ: JOZ Information
Complete Questions JZI -JZ5 if the financial assistance was awarded to a JOBZ qualified business recipient receiving JOBZ benefits. (If not,
go directly to Question 28.)
JZl. What was the amolUlt of private capital investment of the business in the JOBZ zone prior to December 3 I, 2005?
Real (land and bnildings) $
Personal (equipment) $
JZ2. What amolUlt of the qualified business's January 2, 2005 taxable market value was exempt from property taxes payable in 2006 due to
JOBZ qualification? (Please specify each parcel identification number and exempt value of each parcel, attaching an additional sheet
if necessary. Obtain exempt values from the county assessor's office.)
$
for Parcel Identification Number:
JZ3. What was the value of Wind Energy Production Tax, if any, for the JOBZ qualified business that was operating during the period of
Jannary 1, 2005 and December 31, 2005?
$
JZ4/JZ5: Goals and actual perfonnance for the JOBZ qualified business recipient
Did the qualified business paid compensation including benefits to each employee of at least 110 percent of the federal poverty level for a
family offour for each year ($10.23 per hour as ofJuly 1, 2005)?
DYes DNa
(For JOBZ subsidy agreements signed after June 30, 2005, compensation including benefits paid by a qualified business to each
employee on an annualized basis must be at least 110 percent ofthe federal poverty level for a family of four for each year.)
Each line represents an hourly wage level, please round wage levels to the nearest whole dollar and specify the hourly benefit for
each wage level and the number of jObs (i.e., $12.00 hourly wage level, $1.20 hourly benefits and 10 jobs).
JZ4. Goals
Full-time
Hourly
Wage Level
$ 7.00
$ 8.00
$ 9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
$16.00
$17.00
$18.00
$19.00
$20.00
$21.00
$22.00
$23.00
$24.00
$25.00
$26.00
$27.00
$28.00
$29.00
$30.00
$31.00 and higher
Hourly
Benefits
Number of
Jobs
JZ5. Actnals
Full-time
Hourly
Wage Level
$ 7.00
$ 8.00
$ 9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
$16.00
$17.00
$18.00
$19.00
$20.00
$21.00
$22.00
$23.00
$24.00
$25.00
$26.00
$27.00
$28.00
$29.00
$30.00
$31.00 and higher
Handy
Benefits
Number of
Jobs
Minnesota Business Assistance Form (1219105)
Page 3 of7
Dept. of Employment and Economic Development
JZ4/JZ5 (continues)
Part-time Part-time
Hourly Hourly Number of Hourly Hourly Number of
Wage Level Benefits Jobs Wage Level Benefits Jobs
$ 7.00 $ 7.00
$ 8.00 $ 8.00
$ 9.00 $ 9.00
$10.00 $10.00
$11.00 $11.00
$12.00 $12.00
$13.00 $13.00
$14.00 $14.00
$15.00 $15.00
$16.00 $16.00
$17.00 $17.00
$18.00 $18.00
$19.00 $19.00
$20.00 $20.00
$21.00 $21.00
$22.00 $22.00
$23.00 $23.00
$24.00 $24.00
$25.00 $25.00
$26.00 $26.00
$27.00 $27.00
$28.00 $28.00
$29.00 $29.00
$30.00 $30.00
$31.00 and higher $31.00 and higher
Job Retention Job Retention
Hourly Hourly Number of Hourly Hourly Nwnber of
Wage Level Benefits Jobs Wage Level Benefits Jobs
$ 7.00 $ 7.00
$ 8.00 $ 8.00
$ 9.00 $ 9.00
$10.00 $10.00
$11.00 $11.00
$12.00 $12.00
$13.00 $13.00
$14.00 $14.00
$15.00 $15.00
$16.00 $16.00
$17.00 $17.00
$18.00 $18.00
$19.00 $19.00
$20.00 $20.00
$21.00 $21.00
$22.00 $22.00
$23.00 $23.00
$24.00 $24.00
$25.00 $25.00
$26.00 $26.00
$27.00 $27.00
$28.00 $28.00
$29.00 $29.00
$30.00 $30.00
$31.00 and higher $31.00 and higher
Minnesota Business Assistance Fonn (12/9/05)
Page 4 of7
Dept. of Employment and Economic Development
Section 4: Goals and Public Pur se Identified in the A reement
28. Minn. Stat. ~116J.994 requires that business subsidy and fmancial assistance agreements state a public purpose. Which of the following
public purposes were stated in the agreement? (Mark all that applv.)
tJ Enhancing economic diversity
o Creating high-quality job growth
Q Job retention
o Stabilizing the community
Q Increasing tax base (cannot be only purpose)
o Other (please specify)
29. Indicate whether the agreement included the following types of goals, and whether the recipient had attained those goals at the time of
this report. (Fill in the boxes and attainment date(s)for each goal.)
Goals Target attainment All goals
established? dates (mouth & year) attained?
o Yes ONo QYes ONo
QYes ONo QYes ONo
o Yes ONo o Yes ONo
o Yes ONo o Yes ONo
B) Other job-creation and/or retention goals
A} Specific wage and job goals to be attained within 2 years
C) Other wage goals
D) Goals other than wage and job goals
'ess toward attainment (i not documented in uestions 30 and 31.)
30. If you answered questions JZ4-JZS for a qualified business go directly to question 32. For each of the following wage categories,
indicate the job creation and/or retention goals stated in the agreement and the average hourly value of any employer-provided benefits
goals for those jobs. (Onlv indicate job creation goals injull-time equivalents if you are unable to separate goals by full- and part-time
positions.) If you answered questions JZ4-JZ5 for a qualified business go directly to question 32.
Hourly Wage
(excluding benefits)
Full.time
Job
Creation
no hourly wage-level goal
less than $7.00
$7.00 to $8.99
$9.00 to $10.99
$11.00 to $12.99
$13.00 to $14.99
$15.Q() to $16.99
$17.00 to $18.99
$19.00 to $20.99
$21.00 to $22.99
$23.00 to $24.99
$25.00 to $26.99
$27.00 to $28.99
$29.00 to $30.99
$31.00 and higher
Minnesota Business AsSistance Fonn (12/9/05)
Part-time
Job Creation
Job Retention
Hourly VaJue of
Benefits
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Page 5 of7
Dept ofEmpJoymeru and Economic Development
31. Uyou answered questions JZ4~JZ5 for a qualified business go directly to question 32. For each of the following wage categories,
indicate the number of actual jobs created and/or retained since the benefit date and the actual hourly vaJueofany employerwprovided
benefits for those jobs. (Onlv indicate job creation in /ul/~time equivalents if you are unable to separate job creation into /uU- and part-
time positions.) If you answered questions JZ4-JU for a qualified business go directly to question 32.
Hourly Wage
(excluding benefits)
Fbll-time
Job
Creation
less than $7.00
$7.00 to $8.99
$9.00 to $10.99
$11.00 to $12.99
$13.00 to $14.99
$15.00 to $16.99
$17.00 to $18.99
$19.00 to $20.99
$21.00 to $22.99
$23.00 to $24.99
$25.00 to $26.99
$27.00 to $28.99
$29.00 to $30.99
$31.00 and higher
Part~time
Job Creation
Job Retention
Hourly Value of
Benefits
$
$
$
$
$
$
$
$
$
$
$
$
$
$
32. Has the recipient achieved all e:oaIs (see Question 29,30 and 31) and fulfilled ail oblieations stipulated in the agreement (Alarkone.}
o Yes
ONo
Section 5: Recipients Failing to Fulfill Obligations
(Do not comolete this section if you como/eled il on another MBAF submitted to DEED.)
33. During the period January 1,2005 through December 31, 2005, did your organization have any recipients who failed to report as required
by Minn. Stat. *116J.993 and *116J.9947 (Mark one.)
CI Yes (Indicate the name of each recipient/ailing to report and the value a/subsidy or financial assistance awarded to that
recipient. Attach additional pages if necessary.)
Name of recipient
ONo
Type of subsidy or assistance (See Questions 24 & 25.) Value of subsidy or assistance
34. Did your organization have any recipients who failed to achieve any goals 01 fulfill any other obligations under an agreement signed on
or after January 1, 2005, that were required to be fulfilled by the time of this report? {Mark one.}
CI Yes (Complete the remainder o/this section.)
o No (Stop here and submit fonn to DEED.)
Minnesota Business Assistance Form (12/9/05)
Page 6 of7 '
Dept. of Employment and Economic Development
--
For questions 35-39: Provide the following information for each recipient failing to fulf1l1 goals or any other terms cfan agreement that were
to be attained bv the time ofrenortin~. (Attach additional napes ifnecessarv.)
35. Information on recipient and agreement:
Name of recipient in default Type of subsidy or assistance Initial value of subsidy or assistance
Street address of recipient City/Zip code of recipient Outstanding value of subsidy
or assistance
36. Reason(s) for default (Mark all that apply.):
o recipient ceased operation o recipient relocated to a different community
IJ recipient was unable to f1l1 vacant positions o other (Specify reason.)
37. To date, has the recipient fulfilled its repayment obligation? (Mark one.)
Cl Yes o No, recipient has bellun to repay the assistance. o No, recipient has not beenn to repay the assistance.
38. Has the agreement been amended to extend the recipient's deadline for fulfilling its obligations? (Mark one.)
Cl Yes ClNo
39. Describe the steps being taken to bring recipient into compliance or recoup the subsidy:
Return yonr completed MBAF(s) by ADrilI. 2006
EITHER
Mail To:
Minnesota Business Assistance Report
Minnesota Department of Employment and Economic Development - Analysis and Evaluation
I" National Bank Building
332 Minnesota Street, Suite E200
St. Paul, Minnesota 55101-1351
OR
Fax To:
(651) 215-3841
(Next year, please use the online version of this form. It can be found at
www.deed.state.mn.us/Community/subsidies/MBAFForm.htm.)
Mmnesota Busmess Assistance Fonn (12/9/05) Page 7 of7 Dept. of Employment and Economic Development
APPENDIX F
REDEVELOPMENT QUALIFICA nONS FOR THE DISTRICT
In May of200S, LHB prepared a Report ofInspectionProcedures and Results for Determining Qualifications
of a Tax Increment Financing District as a Redevelopment District. That report is being updated and will be
finalized in March of 2006. The report is being submitted under a separate cover.
APPENDIX
F-]
APPENDIX G
BUT/FOR QUALIFICATIONS
Difference
$1,817,000
16.530.000
$14,713,000
Current Market Value - Estimate
New Market Value - Estimate
Present Value of Tax Increment
3,220,954
Difference
$11,492,046
Value Likely to Occur Without TIF is Less Than:
$11,492,046
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF
Plan) for Tax Increment Financing District No. 1-4 (District), as required pursuant to Minnesota Statutes,
Section 469.175, Subdivision 3 are as follows:
1. Finding that Tax Increment Financing District No. 1-4 is a redevelopment district as defined inMS.,
Section 469.174, Subd. JO(a)(1).
The District consists of 12 parcels, with plans to redevelop the area for housing and commercial
purposes. At least 70 percent of the area of the parcels in 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 F of the TIF Plan.) It has further been
determined that these conditions are reasonably distributed through the District. These findings and
the conclusion that the District qualifies under the statutory criteria and formulas for a redevelopment
tax increment financing district are further described in the "Report ofInspection Procedures and
Results for Determining Qualifications of a Tax Increment Financing District As a Redevelopment
District, Hopkins Block 64, Tax Increment Financing District," dated June 9, 2005, prepared by
LHB, Inc. and updated for purposes of creating the District (and appendices).
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 foreseeablefuture and that
the increased market value of the site that could reasonably be expected to occur without the use of
tax incrementfinancing would be less than the increase in the market value estimated to resu/tfrom
the proposed development after subtracting the present value of the projected tax increments for the
maximum duration of Tax Increment Financing District No. 1-4 permitted by the TlF 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: The proposed
development consists of the construction of a mixed use condominium, townhouse and retail
development consisting of approximately 52 condominiums, 9 townhouses and 5300 square feet of
retaiVcommercial space. The proposed development will clean up blighted sites and remove
APPENDIX
G-I
substandard buildings in the City's downtown area and continue with the redevelopment ofthe area.
City staff and consultants have reviewed the estimated redevelopment costs for the development
which include acquisition, demolition, infrastructure improvements, site preparation and
environmental remediation and the available methods of financing. The developer was asked for
and provided a letter and a proforma as justification that the developer would not have gone forward
without tax increment assistance. (See attachment in Appendix G ofthe TIF Plan.) Due to the high
cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount
of commercial and for sale housing property for expansion adjacent to the existing project, the
incompatible land uses at close proximity, and the cost of financing the proposed improvements, this
project is feasible only through assistance, in part, from tax increment fmancing.
The increased market value of the site that could reasonably be expected to occur withour the use of
tax incrementfinancingwould be less than the increase in market value estimated to resultfrom the
proposed development after subtracting the present value of the projected tax increments for the
maximum duration of the TIF District permitted by the Plan: This finding is justified on the grounds
that the cost of site and public improvements and utilities add to the total redevelopment cost.
Historically, site and public improvements costs in this area have made redevelopment infeasible
without tax increment assistance. At the current time, the site has an estimated $1,312,700 in land
acquisition, demolition and remediation costs. In addition, the site requires substantial other site
preparation activities to prepare it for development. Finally, the development requires the
expenditure of substantial sums for the construction of parking to serve the owners of the housing
units. These costs result in a cost per unit for land that exceeds the amount acceptable under current
or foreseeable market conditions. The tax increment is needed to reduce these costs to a point where
the housing units will be marketable. Therefore, 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. Attached in Exhibit G of the TIF Plan is a proforma which
shows that in order to make the project financially feasible, $2,900,000 in TIF is needed to offset the
high cost of land acquisition, site preparation and parking. The Development Agreement is
anticipated to contain a look-back provision to ensure that projected profits match the actual results.
A comparative analysis of estimated market values both with and without establishment of the
District and the use of tax increments has been performed as described above. If all development
which is proposed to be assisted with tax increment were to occur in the District, the total increase
in market value would be up to $14,713,000. The present value of tax increments from the District
is estimated to be $ 3,220,954. It is the Council's finding that no development with a market value
of greater than $ 11,492,046 would occur without tax increment assistance in this district within 25
years. This finding is based upon evidence from general past experience with the high cost of
acquisition and public improvements in the general area ofthe District. (See Cashflow in Appendix
D of the TIF Plan.)
3. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1-4
conforms to the general plan for the development or redevelopment of the municipaliry as a whole.
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the
general development plan of the City.
4. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1-4 will
afford maximum opportuniry, consistent with the sound needs of the Ciry as a whole, for the
development or redevelopment of Redevelopment Project No.1 by private enterprise.
APPENDIX
G-2
The project to be assisted by the TIF District will result in increased employment in the City and the
State of Minnesota, the redevelopment of substandard properties, increased tax base of the State and
add a high quality development to the City. Through the implementation of the TIF Plan, the HRA
and City will also increase the availability of safe and decent life-cycle housing in the City.
5. Finding that the expenditure of tax increment serves a primarily public purpose.
The private benefit that would be enjoyed by the developer jf it is able to proceed with the proposed
development is the provision of tax increment financing in an estimated principal amount of
$2,900,000 (net present value).
However, the Council fmds that this "private benefit" is necessary for the City and HRA to accept
in order to achieve the many public benefits which implementation ofthe development will provide.
Those public benefits substantially outweigh any "private benefit." It is unlikely that redevelopment
of the District would occur without public assistance. At the time that the Council approved creation
of Tax Increment Financing District No. 1-3, the Council made numerous findings of public benefit
that would result from the developments proposed within that tax increment financing district. The
Council hereby reaffirms those findings of public benefit as they relate to the property to be included
in the District and to the proposed development of the District. Therefore, the Council continues to
find that the public expenditures to be expended pursuant to the proposed District in implementing
the contemplated development would be primarily for public benefit and that any private benefits
wouJd be merely incidental.
6. Finding concerning modification of the Redevelopment Plan for Project NO.1.
At the time that the Council approved creation of Tax Increment Financing District No. J-3, the
Council made findings concerning the modification of the Redevelopment Plan for Redevelopment
Project No.1, which fmdings are hereby reaffirmed with respect to the current modification of the
Redevelopment Plan.
APPENDIX
0-3
City Of Hopkins Market And Main
TIFDistrict 1-4
But For Test
ISOURCFS OF FUNDS
Construction Loan - Commercial
SalesProcecds
Tax Increment FmanClng
""""
""~
ITOTALSOuaCES OF FUNDS
5684,673
17,973,210
2,900,000
o
o
521557883
IUSES OF FUNDS
AequblUoa eo.DfSltt: ImproveDlelltJ
Land &.Jmpmvements
Rem~dllrl1on
Other- west line relocation
TotelAc uisitionCosts
TotalPToJed
"''''
51,012,700
250,000
50000
$131700
CollltractlOll
Construction Costs - Condos
Construction Costs. Townhomes
nnanllmprovcmcnl AnOWRDCe
SlleSignage
SAClWAC
Contingency
CustomerSatisfactiOllEscrow{warrantvworlo:)
ITotaI ConstJ\lCllon Costs
$10,031,024
2,730,121
81,915
35,000
81,000
643,903
60,000
513,662.963
.....--
Architectural Services
lnteriorDeslgnCoordlllator.buyerselections
Intenor Design. Common Area
Architeetural1nspeclion
ArchiteclufalRelmbursables
Soil Studies
SurveyslPlaltlng
CIC.P1at
ClVlIEngineerlLandscapeArchitect
StrueturalEngineer
Mecl\lU1ica1lEl~tricalEnglneer
Special ConsuItanls
ITotaIArchilectural/EIII!1l1eennll:
$191,904
45,000
55,000
113,860
15,000
o
25,000
19,200
44.000
37,000
o
5000
$550:964
MarllzliDa
Advertising
CoIla1eral Materials
Events & Promotions
GraphlcDesignlPhotography
Sales Center
Consultants
BuyerCommunicatlon
PubhcRelatlons
""~
ITotalMarketinJl:
1135,000
<<>.000
25.000
30,000
100,000
30.000
24.000
18,000
120,000
$522,000
CarrJiol/Operatbla
Builders Risk lnsurance
Real EstllteTaxes duringconstrucbon
1st Year Operating Deliclt-Commerclal
1st Year Opor3nngDefiClt-Resldenbal
OperlItingResesve
Special ComaItaall
Appraisal
EnVlronmentalConsultanl$
Feasibility Study
MarkebngStudy
Leasing CoJlllIllSSlons on Commercial Space
Construcbon Loan Origination Feo
TIFReserve,LegalFees,etc
Park DechcationFee
a Fees _ Le /FinanCIal Consultant
TotalFinancln Costs
ntlelllldRetordiDa
Title Insurance
Mortgage Regislrat10n
RecorcbngFees-ConstLoan
ClosmgFees-ConstLoan
ClosinglRocorchngFees-Uruts
LenderRel~Fees-Uruts
Disbursement Fees
AbstraetFee
NameSearcb
AssessmenlSearch
OthCl'ntleandRecordin~
ITotai Title and Recordm
LqalfAec:01IDtUJa
Legai-RealEstatef.6Ullcbng
Legal-Condo/Other
LeJllli-Easements
ITotalLeJllliCoSlS
Subtotal Hard CostsILand
SubTotal of Soft Costs
Soft Cost Contingency
Rel:iwred Retum to EQwty Investor
ITOTAL DEVEWPMENI' COSTS
DeveloperProfil
500%
1500"A.
I
15.20/.
TotalProJ<<t
Bo.".
34,636
36,686
25,000
31,500
o
S15,000
30,000
3,500
10,000
54,610
S143,084
o
o
15000
1208484
S18,658
34,340
SOO
1.000
6,000
12,000
2,800
500
500
500
1,500
S139,407
$40,000
40,000
15000
S95:0OO
S14,975,663
3,276,173
163,809
300,000
SI8,715,644
S1,842,23'
BUT FOR FOR TIF PLAN 02-21-2006