CR 90-138 Termination Development Project
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J\.'l.ly 23, 1990
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council Report: 90-138
TERMINATION OF REDEVELOPMENT PROJECT
AND 'rAX INCREMENT FINANCING DISTRICT
~opos~ Action~
staff recommends adoption of the following motion:~ove to adopt
Resolution NQ.i.. ~O~75 Terminating the RedevelQP-ment project., and Tax
Increment Financing Dis~rict Established on November 7, 1989.
Following approval of this action a certified copy of the resolution
will be filed with Hen~epin County.
overvi$w.
Tax Increment District 2-2 was established in November 1989 in
conjunction with the approval of the document entitled "Reorganization
and Modification of Redevelopment Projects in Tax Increment Financing
Districts in the city of Hopkins."
The purpose of this distri.ct was to facilitate the redevelopment of
the Harley Hopkins School by Hopkins School District #270. It has now
been determined that tax incr'ement assistance will not be required in
order to facilitate this redevelopment effort.
With the present state and county scrutiny of tax increment financing,
j,t is in the best interest of the city to terminate this district.
. ~!~.ry :tUll.. t.~.L..
Q What is the impact of this action?
The only impact of this action is to eliminate the possible
use of tax increment financing at some future date for this
project. However! it has already been determined by city
staff and school officials that such assistance will not be
required.
bH.~q .i:QtQ:rm.qiQn,
o Resolution No: 90-75
o Letter - Holmes & Graven
Alt.ernatiy&s _,
The city council has the following alternatives regarding this issue:
1. Approve the action as requested by staff. This resolution is
necessary in order to facilitate termination of the district.
2. ContinuE for further information.
3. Deny the request. This would allow the tax increment district
to remain in existence. The city staff has a concern of how
this mi~ht be perceived by both the State and County. At the
present time the project is tax exempt and therefore no tax
increments are received. However, should the property become
taxable at some future date, the city would receive tax
// ,incrememts from the project without any investment of pUblic
// do114rs.
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Kerr an, Plannng &
Develvpment Director
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CITY OF HOPKINS
Hennepin CountYi Minnesota
RESOLUTION NO: 90-75
RESOLUTION TERMINATING TAX INCREMENT
FINANCING DISTRICT NO. 2-2 ESTABLISHED
ON NOVEMBER 7, 1989
BE IT RESOLVED by the City of Hopkins, Minnesota as follows:
~ection, 1. Recitals.
1.019 The Housing and Redevelopment Authority in and for
t:he city of Hopkins ("Authority") and the City of
Hopkins ("City") are authorized to create and
establish redevelopment projects in order to
discourage blight and blighting influences within the
city.
1.02. On November 7, 1989 the Authority and the City
approved the creation of Tax Increment Financing
District No. 2-2 ("TIF Districtn) within
Redevelopment Project No. :2 (nproject"), to finance
redevelopment of the Harley Hopkins School, in
accordance with Minn. stat. Sections 469.174 to
469.179 (t1TIF Actn) .
1.03. The Authority also requested certification of the TIF
District by the County Auditor, who designated the
district as TIF District No. 159.
1.04. The Authority has determined that the redevelopment
objectives fer the project can be accomplished
without the use of tax increment funds from the TIt
District are now outstandingg and it is therefore in
the public interest to terminate the TIF District.
1.05. Termination Dfthe TIF District will result in a
modifh..ation of document titled "Reorganization and
Modification of Redevelopment Projects and Tax
Increment Financing Districts, City of Hopkins,
Minnesota", dated November 7, 1989 (the
M.od.ification"), which the Authority and the City
approved by resolution dated November 7, 1989.
1.06. ThQ Authority approved Resolution No. 90-270 on
August 7, 1990 i.srminating the TIF District and
referring the matter to the City Council for
consideration.
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section 2~ ApDroval of Te~~nation: Furtb_r prog~~g~
2.01.. The City finds that it is necessary, desirable, and
in the pUblic interest to terminate the TIP
Districts.
2.02. Termination of the TIF District and the TIP Plan
therefor as set forth in the MOdification is hereby
approved by the City.
2.03. It is the city's intent that any tax increment from
the TIF District paid to the Authority from taxes
collected in 1990 will be returned to the county
Auditor for distribution to all taxing jurisdictions.
2.04. The city clerk is authori~ed and directed to transmit
a certified copy of this resolution to the Hennepin
County Director of Property Taxation with a r.equest
that the Director terminate the TIF District and
adjust the property tax records accordingly.
2.05. The Authority is requested to file a copy of this
resolution with the Minnesota Commissioner of
Revenue.
2.06~ The city clerk is authorized and directed to transmit
a certified copy of this resolution to the Authority.
Adopted by the City Council of the City of Hopkins, Minnesota
this 7th day of August, 1990.
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ATTEST:
~elson W~ Berg, Mayor
James A-:-- Genellie, city Clerk
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HOLMES & GRAVEN
Cf:lARTERED
STEPHEN J. BlJBUI..
470 Pillsbury Center. Minneapolis. Minnesota 55402
(6l2\ 33".')300
,\Ilmney at Law
Direct Dial (612) 337-9228
July 6, 1990
Mr. James Kerrigan
City of Hopkins
1010 S. First Street
Hopldp.s, MN 55343
RE: TIP District No. 2-2
Dear Jim:
We reeently discussed the pros a.nd cons of terminating the Harle)" Hopkins School
Tax: I!1(~rement District (Tn' District No. 2-2). You mentioned the possibility of
Mt&ining the district to help fina.nce other activities in Redevelopment Project No.
2.
On further reflection, retaining TIP District No. 2-2 is probably inadvisable unless
the inerement will be used within that district. The district is a redevelopment
district th~t was adopted after amendments created in the 1989 sf.lecial session
went inti) effect. Under Minn. Stat. Section 469.178, subd. 4j, at least 90% of the
reVe~tUes derived trom tax increments from a. redevelopment distrid must be used
to finanee the cost of correcting conditions that allow designation of the
redevelopment district. In the ease of TIF District No. 2-2, such costs must relate
to redevelopment of the sehool building itself. Only 10% of the tax increment
from that district could be used for other activities, such as road improvements
outside the district. As the other 9096 of the increment would not be used at all,
the HRA would be required to retarn that amount to the County as excess
increment. Th.erefore, I recommend that you proceed with your plans to terminate
the TIP District.
I would be happy to review the termination resolution you prepar ad earlier. If you
have any other questions or comments, please let me know.
~.
Stephen J, B12bul
SJB:sg
HPllO-22
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