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City Council Resolution 2002-12Council member Bruce Thielen CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA introduced the following resolution and moved its adoption: RESOLUTION NO. 2002-12 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-29 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Monticello, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Board of Commissioners of the Monticello Housing and Redevelopment Authority (the "HRA") has heretofore established Central Monticello Redevelopment Project No. 1 and adopted a Redevelopment Plan therefor. It has been proposed by the HRA and the City that the HRA adopt a Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. 1 and establish Tax Increment Financing District No. 1-29 (the "District") therein and adopt a Tax Increment Financing Plan therefor (collectively, the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047 and 469.174 through 469.179, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The Council has investigated the facts relating to the Plans. 1.0-33. The City has performed all actions required by law to be performed prior to the adoption and approval of the proposed Plans, including, but not limited to, notification of Wright County and Independent School District No. 882 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and submitted to the Council and/or made a part of the City or HRA files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to the bases 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 Central Monticello Redevelopment Project No. Section 2. Findinsis for the Adoation and Approval of the Plans. 2.01. The Council hereby finds that the Plans, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public interest and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of Tax Increment F1nancin2 District No. 1-29. 3.01. The Council hereby finds that Tax Increment Financing District No. 1-29 is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 1 l . 3.02. The Council further finds that the proposed development 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. 3.03. 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. Section 4. Public Purpose 4.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide housing opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 5. Aparoval and Adoption of the Plans 5.01. 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 Executive Director of the HRA. 5.02. The Auditor of Wright 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 HRA 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. 5.03. 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 469.175, Subd. 4a. The motion for the adoption of the foregoing resolution was duly seconded by Council member Clint Herbst , and upon a vote being taken thereon, the following voted in favor thereof: Roger Belsaas, Roger Carlson, Clint Herbst, Brian Stumpf and Bruce Thielen and the following voted against the same: None Dated: March 25, 2002 Mayor (Seal) ATTEST: City Clerk EXHIBIT A RESOLUTION 9 2002-12 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-29, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that Tax Increment Financing District No. 1-29 is a housing district as defined in M.S., Section 469.174, Subd. 11. Tax Increment Financing District No. 1-29 consists of three parcels and vacated rights-of-way. The development will consist of single-family owner -occupied townhomes/housing. The housing development is expected to be purchased by families with incomes below 100% to 115% of metropolitan -area median income. The market value of non -assisted housing or commercial property will be less than 20 percent of the total fair market value of the planned improvements. Appendix E of the TIF Plan contains background for the above finding. 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 increments for the maximum duration of Tax Increment Financing District No. 1-29 permitted by the Plan. The proposed development, in the opinion of the City, tii,ould not reasonably be expected to occur solely through private investment tii,ithin the reasonably foreseeable future: This finding is supported by the fact that the development proposed in this plan is a housing project that meets the City's objectives for development and redevelopment. An existing structure will be acquired and demolished. The cost of land acquisition, site and public improvements and utilities makes this housing district development infeasible without City assistance. Due to the high cost of building affordable new housing in the City and the cost of financing the proposed public improvements, this project is feasible only through assistance, in part, from tax increment 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 F of the TIF plan). The increased market value of the site that could reasonable 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 rma_rinntin duration of the TIF District permitted by the Plan: The finding is justified on the grounds that the cost of land acquisition, site and public improvements and utilities add to the total development cost. City staff have targeted this area for redevelopment for several years. Therefore, the City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided to the development. 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 $2,540,280. The present value of tax increments from the District is estimated to be $367,529. It is the Council's finding that no development with a market value of greater than $2,172,751 would occur without tax increment assistance in this district within 25 years. This finding is based upon general past experience with the high cost of acquisition and public improvements in the general area of the District (see Cashflow in Appendix D of the TIF plan). 3. Finding that the Tax Increment Financing Plan for Tar Increment Financing District No. 1-29 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the Plan and found that the Plan conforms to the general development plan of the City. 4. Finding that the Ta -v Increment Financing Plan for Tax Increment Financing District No. 1-29 will afford maxitnuin opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Central Monticello Redevelopment Project No. I by private enterprise. Through the implementation of the Plan, the HRA will provide an impetus for residential development, which is desirable or necessary to satisfy an increased need for affordable housing within the City.