Loading...
City Council Resolution 2024-59CITY OF MONTICELLO, MINNESOTA RESOLUTION NO. 2024-59 RESOLUTION APPROVING A MODIFICATION OF THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-42 WHEREAS, on February 23, 2022, the City of Monticello Economic Development Authority (the "Authority") approved a Tax Increment Financing Plan (the "Original TIF Plan") for Tax Increment Financing District No. 1-42 (Headwaters Apartment Project) (the "TIF District") located within the Central Monticello Redevelopment Project Area No. 1 (the "Redevelopment Project"), pursuant to Minnesota Statutes, Sections 469.001 to 469.047, Sections 469.090 to 469.1081, and Sections 469.174 to 469.1794, all inclusive and as amended (collectively, the "Act"), and on February 14, 2022, the City of Monticello, Minnesota (the "City") approved the establishment of the TIF District; and WHEREAS, on May 23, 2022 and June 8, 2022, respectively, the City and the Authority approved a modification to the Original TIF Plan (the "2022 Modification"), which amended the budget for the TIF District; and WHEREAS, the City and Authority have determined a need to modify the Original TIF Plan in order to (i) enlarge the geographic area of the TIF District, (ii) change the description of the development activities proposed to be constructed within the TIF District, and (iii) revise the budget for the TIF District, all as reflected in that certain document titled "Modified Tax Increment Financing Plan for Tax Increment Financing (Housing) District No. 1-42 Central Monticello Redevelopment Project No. 1" (the "2024 Modification"); and WHEREAS, pursuant to Section 469.175, subd. 4(b) of the Act, a tax increment financing plan may not be modified without public hearing or the findings required to be made for the original tax increment financing plan if the modification includes, among other things, any reduction or enlargement of the geographic area of the project or tax increment financing district; and therefore, the 2024 Modification requires the same notice, discussion, public hearing and findings required for the approval of the Original TIF Plan; and WHEREAS, except for approval of the TIF District by the Board of Commissioners of the Authority, the City and its consultants have performed all actions required by law to be performed prior to the adoption and approval of the 2024 Modification, 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 WHEREAS, on the date hereof, the City Council of the City (the "City Council") conducted a public hearing on the 2024 Modification at which the views of all interested parties were heard; and WHEREAS, certain written materials and information (collectively, the "Materials") relating to the 2024 Modification and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the City Council and/or made a part of the City files and proceedings on the 2024 Modification. The Materials include data, information, an application, project sources and uses, and other information supplied by Monticello MF West LLC, a Minnesota limited liability company, 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 City 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. NOW THEREFORE, BE IT RESOLVED by the City Council (the "City Council") of the City of Monticello, Minnesota (the "City") as follows: 1. Redevelopment Plan. The City hereby finds that the 2024 Modification is consistent with the redevelopment plan for the Redevelopment Project. 2. Modification to Tax Increment Financing District No. 1-42. The City hereby approves the 2024 Modification. 3. Tax Increment Financing Plan. The Original TIF Plan as modified by the 2024 Modification (the "Modified 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 Modified 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 Modified 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 Modified 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 that 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 MN 190\170\958597.v 1 2 to support the facility. Without the proposed 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 Modified TIF Plan and is incorporated herein by reference. (c) The Modified TIF Plan for the TIF District conforms to the general plan for development or redevelopment of the City as a whole. The City has adopted land use controls to guide the use of property. The proposed development plans for the Project in the TIF District have been reviewed by the Planning Commission and the City Council. (d) The Modified 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 Modified TIF Plan, the City will provide an impetus for construction of affordable housing 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 2 are hereby incorporated by reference into and made a part of the Modified TIF Plan. Background information and facts supporting all the above findings are set forth in the Modified TIF Plan which is hereby incorporated by reference into and made a part of this resolution. The City reaffirms the findings it made connection with the adoption of the original TIF Plan and the findings made therein are hereby incorporated by reference into and made a part of this resolution as supplemented herein 4. Public Purpose. The adoption of the Modified 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. 5. Subject to approval of the 2024 Modification by the Authority, Authority staff is authorized to forward a copy of the Modified TIF Plan to the Department of Revenue and the State Auditor pursuant to Minnesota Statutes 469.175, subd.4(a). 6. The City Clerk is authorized and directed to forward a copy of the Modified TIF Plan to Wright County. MN190\170\958597.v1 3 DATED: June 24, 2024 Mayor ATTEST: Cy Clerk San w� :vS(anre�(� MN 1 90\170\958597.vl