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City Council Resolution 2011-81CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA RESOLUTION NO. 2011-81 ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-39 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 City of Monticello Economic Development Authority (the "EDA") has heretofore accepted jurisdiction over Central Monticello Redevelopment Project No. 1 and the Redevelopment Plan therefore. It has been proposed by the EDA and the City that the City adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for Central Monticello Redevelopment Project No. 1 (the "Project Area") and establish Tax Increment Financing District No. 1-39 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, Sections 469.090 to 469.1082 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 EDA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The EDA and City will perform all actions required by law to be performed prior to certification of the District and 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 on August 2, 2011, approval of the Plans by the EDA, 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 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 the Project Area, but is however, modifying the Redevelopment Plan therefor. Section 2. Findings for the Adoption and Approval of the Redevelopment Plan Modification. 2.01. The Council approves the Redevelopment Plan Modification, and specifically finds that: (a) the land within the Project area would not be available for redevelopment without the financial aid to be sought under this Redevelopment Plan; (b) the Redevelopment Plan, as modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project by private enterprise; and (c) that the Redevelopment Plan, as modified, conforms to the general plan for the development of the City as a whole. Section 3. Findings for the Establishment of Tax Increment Financing District No. 1-39. 3.01. The Council hereby finds that the District is in the public interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. 12 of the Act. 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 redevelopment or development 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 result in increased employment in the state and thereby serves a public purpose. For the reasons described in Exhibit A. the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make this development financially feasible. As such, any private benefits received by a developer are incidental and do not outweigh the primary public benefits. Section 5. Approval 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 CERTIFICATION STATE OF MINNESOTA COUNTY OF WRIGHT I hereby certify that the foregoing is a true and correct copy of a resolution duly passed, adopted and approved by the Monticello City Council at their scheduled meeting on August 22, 2011, and recorded in minutes of said meeting. Jeff O'Neill, City Administrator Notary Public: Date: EXHIBIT A RESOLUTION NO. 2011-81 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-39 as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: 1. Finding that the Tax Increment Financing District No. 1-39 is an economic development district as defined in M.S., Section 469.174, Subd. 12. Tax Increment Financing District No. 1-39 is a contiguous geographic area within the City's Central Monticello Redevelopment Project No. 1, delineated in the TIF Plan, for the purpose of financing economic development in the City through the use of tax increment. The District is in the public interest because it will facilitate construction of an approximately 40,000 square foot manufacturing facility which will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; it will increase employment in the state, and preserve and enhance the tax base of the state. 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. 1-39 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: This finding is supported by the fact that the development proposed in this plan is a manufacturing facility that meets the City's objectives for economic development. Poor soil conditions in the location have required extraordinary site improvements and utility costs resulting in high land acquisition costs to prospective private developers. These high costs make development of the facility, in this location, infeasible without public assistance. Therefore, the City and EDA have served as the land developer and have built the infrastructure to support private development. The EDA will sell the property at a subsidized cost, using tax increments generated by the development to repay itself for these costs through an interfund loan, rather than passing these costs on to the developer. The developer was asked for and provided a letter and a pro forma as justification that the developer would not have gone forward without tax increment assistance (see attachment in Appendix F). 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 TIF Plan: This site is part of a new industrial park, with high start-up costs incurred by the EDA to acquire and grade land and install infrastructure. If the EDA attempted to sell the land at a price reflecting the value of all infrastructure costs incurred, it would be unlikely to find willing buyers. All parcels previously sold in this industrial park also requested tax increment assistance and the City expects that future sales will require similar incentives. 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. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $2,275,993 (see Appendix D and F of the TIF Plan) c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $375,736 (see Appendix D and F of the TIF Plan). d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $1,900,257 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for Tax Increment Financing District No. 1-39 conforms to the general plan for the development or redevelopment of the municipality 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. I- 39 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of Central Monticello Redevelopment Project No. 1 by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, increased tax base of the State, and add a high quality development to the City. EDA. 5.02. 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. 5.03 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 Monticello Economic Development 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. 5.04. The EDA Director is further authorized and directed to file a copy of the Plans with the Commissioner of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. ADOPTED BY the Monticello City Council this 22'd day of August, 2011. ATTEST: Jeff , City Administrator VOTING IN FAVOR: 44stl (7i-lgGlrtl VOTING IN OPPOSITION: N,^OA(', CITY OF MONTICELLO Clint Herbst, Mayor PC rre1 wi� AS as 7A I JTa )D-�