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City Council Resolution 2022-15CITY OF MONTICELLO, MINNESOTA RESOLUTION NO. 2022-15 RESOLUTION APPROVING THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 1-43 (HEADWATERS VILLA PROJECT) WITHIN CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND THE ADOPTION OF THE TAX INCREMENT FINANCING PLAN RELATING THERETO WHEREAS, the City of Monticello Economic Development Authority (the "EDA") has requested that the City of Monticello, Minnesota (the "City") create Tax Increment Financing District No. 1-43 (the "TIF District") within the Central Monticello Redevelopment Project No. 1 (the "Project") and adopt a tax increment financing plan therefor (the "TIF Plan"), pursuant to Minnesota Statutes, Sections 469.090 to 469.1081, as amended, and 469.174 to 469.1794, as amended (collectively, the "Act"); and WHEREAS, the City and EDA have investigated the facts relating to the proposed TIF District and have caused the TIF Plan for the TIF District to be prepared; and WHEREAS, except for approval of the TIF District by the Board of Commissioners of the EDA, the City and its consultants have performed all actions required by law to be performed prior to the establishment of the TIF District and the adoption and approval of the proposed TIF Plan, including, but not limited to, notification of the commissioner of Wright County, Minnesota ("Wright County") representing the area included in the TIF District, notification of Wright County and Independent School District No. 882, and approval of the TIF Plan by the City's planning commission; and WHEREAS, on the date hereof, the City Council of the City conducted a public hearing relating to the TIF Plan and the establishment of the TIF District, at the views of all interested parties were heard at the public hearing; and WHEREAS, certain written materials and information (collectively, the "Materials") relating to the TIF Plan 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 TIF Plan. The Materials include data, information, an application, project sources and uses, and other information supplied by Headwaters Development LLC, or an entity related thereto or affiliated therewith (the "Developer") as to the activities contemplated therein, and information constituting or relating to (1) why the assistance satisfies the so-called "but for" test and (2) the bases for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies, and adopts the Materials, 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; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Monticello as follows: 1. Tax Increment Financing District No. 1-43. The City hereby approves the establishment of the TIF District within the Project, the boundaries of which are described in Section 2.03.2 and Exhibit V of the TIF Plan. 2. Tax Increment Financing Plan. The TIF Plan is adopted as the tax increment financing plan for the TIF District and is incorporated herein by reference, and the City Council makes the following findings consistent with the TIF Plan: (a) The TIF District is a "housing district" within the meaning of Section 469.174, Subdivision 11 of the Act, as described in Section 2.03.3 of the TIF Plan, because (i) it consists of a project, or portions of a project, intended for occupancy, in part, by persons or families of low and moderate income as defined in Chapter 462A, Title II of the National Housing Act of 1934; the National Housing Act of 1959; the United States Housing Act of 1937, as amended; Title V of the Housing Act of 1949, as amended; and any other similar present or future federal, state, or municipal legislation or the regulations promulgated under any of those acts, and (ii) no more than 20% of the square footage of buildings that will receive assistance from tax increments within the TIF District will consist of commercial, retail, or other nonresidential uses. (b) In the opinion of the City Council, the development proposed in connection with establishment of the TIF District would not occur solely through private investment within the reasonably foreseeable future, and the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing ("TIF Assistance") 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 TIF District as described in the TIF Plan. The above finding is based on a request for tax increment assistance to the City submitted by the Developer, stating that the TIF Assistance is needed from the City and that without the use of tax increment financing, the proposed development could not proceed. The City also finds in the Materials the Developer has demonstrated that the proposed use of tax increment financing is needed to offset the high construction costs of high-quality low to moderate income housing and associated infrastructure required to support the facility. Without the proposed MN 190\ 163\777318.v 1 assistance, these initial up -front costs would make it infeasible for the Developer to be able to charge the affordable rates required for low to moderate income residents. Due to the high construction costs of quality housing and the required associated infrastructure, and the limitation on rents available to developers of housing with an affordable component, the City has no expectation that other similar development would occur without TIF Assistance. Therefore, the City reasonably believes that the expected increase in market value at this site without TIF Assistance would be minimal. A comparative analysis of estimated market values both with and without establishment of the TIF District and the use of tax increments has been performed. Such analysis is included as Exhibit I to the TIF Plan and is incorporated herein by reference. (c) The TIF Plan for the TIF District conforms to the general plan for development or redevelopment of the City as a whole as determined by the City's planning commission. (d) The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the TIF District by private enterprise. Through the implementation of the TIF Plan, the City will provide an impetus for construction of housing for seniors by a private developer on currently underdeveloped and underutilized land, thereby increasing housing options in the City and encouraging potential further development of the surrounding properties by other private developers within the Project. (e) The provisions of this Section 1 are hereby incorporated by reference into and made a part of the TIF Plan. Background information and facts supporting all the above findings are set forth in the TIF Plan which is hereby incorporated by reference into and made a part of this resolution. 3. Public Purpose. The adoption of the TIF Plan conforms in all respects to the requirements of the Act and will help fulfill a need to develop an underutilized area of the City, eliminate blighting factors, to provide increased housing options to City residents, to provide affordable housing for seniors in the City, to improve the tax base, and to improve the general economy of the State, and thereby serves a public purpose. 4. Certification. Subject to approval of the TIF Plan by the Board of Commissioners of the EDA, the TIF District is hereby established and the TIF Plan, as presented to the City Council on this date, including without limitation the findings and statements of objectives contained therein, is hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Finance Director. Approval of the TIF Plan does not constitute approval of any project or a development agreement with any developer. City and EDA staff and consultants are authorized and directed to proceed with implementation of the TIF Plan and to transmit the request for MN 190\163\777318.v1 certification of the TIF District to the Wright County Auditor in such form and content as the County Auditor may specify. The Wright County Auditor is requested to certify the original net tax capacity of the TIF District as described in the TIF Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased in accordance with the Act. 5. Filing. The City Administrator is authorized and directed to file copies of the TIF Plan with the Commissioner of Revenue and Office of the State Auditor. Approved by the City Council of the City of Monticello, Minnesota on February 14, 2022. M o ATTEST: Ci t y Clerk MN190\163\777318.v1