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City Council Resolution 2001-42.f CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA Council member Brian Stumpf introduced the following resolution and moved its adoption: RESOLUTION NO. 2001-42 RESOLUTION ADOPTING THE MODIFICATION TO THE DEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-28 WITHIN CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND ADOPTING THE 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 (the "Board") of the Monticello Housing and Redevelopment Authority (the "HRA") has heretofore established Central Monticello Redevelopment Project No. 1 and adopted the Development Plan therefor. It has been proposed by the HRA and the City that the City adopt the Modification to the Development Plan for Central Monticello Redevelopment Project No. 1 and establish Tax Increment Financing District No. 1-28 (the "District") therein and adopt the Tax Increment Financing Plan therefor (collectively, the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, 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 HRA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The HRA and City have performed all actions required by law to be performed prior to the establishment 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, 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 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. 1 nor the goals and objectives of the Redevelopment Plan therefor. Generally, the substantive changes include the addition of Tax Increment Financing District No. 1-28. Section 2. Findings for the Adoption 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 purpose and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findinsis for the Establishment of Tax Increment Financing District No. 1-28. 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. 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 City elects to make a qualifying local contribution in accordance with Minnesota Statutes, Section 273.1399, subd. 6(d), in order to qualify the District for exemption from state aid losses set forth in Section 273.1399. 3.04. 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 employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. 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 City Clerk. 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 Housing and Redevelopment 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 City Clerk is further authorized and directed to file a copy of the Plans with the Commissioner of Revenue. The motion for the adoption of the foregoing resolution was duly seconded by Council member Roger Carlson , 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: June 11, 2001 -'OOOIW�/ Mayor (Seal) ATTEST: City Clerk EXHIBIT A RESOLUTION # 2001-42 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-28 as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: Finding that the Tax Increment Financing District No. 1-28 is an economic development district as defined in M.S., Section 469.174, Subd. 12. Tax Increment Financing District No. 1-28 is a contiguous geographic area within the City's Central Monticello Redevelopment Project No. 1, delineated in the Plan, for the purpose of financing economic development in the City through the use of tax increment. The District consists of a portion of Central Monticello Redevelopment Project No. I not meeting requirements for other types of tax increment financing districts, and is in the public interest because it will: (a) facilitate 10,000 s.f. structure for production and office space and thereby discourage commerce, industry, or manufacturing from moving operations to another state or municipality; (b) increase employment in the state; and (c) 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. 1-28 permitted by the 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. The cost of land acquisition, site and public improvements and utilities makes development of the facility infeasible without City assistance. The developer was asked for and provided justification that the project would not have gone forward without tax increment assistance. 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 maximum duration of the TIF District permitted by the Plan: The City supported this finding on the grounds that the cost of land acquisition, site and public improvements and utilities add to the total development cost. Historically, site development costs in this area have made development infeasible without tax increment assistance. This site has been marketed for several years without success. Therefore, the City reasonably determines that no other development of similar scope is anticipated on this site �v ithout 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 $490,000. The present value of tax increments from the District is estimated to be $90,000. It is the Council's finding that no development with a market value of greater than $305,923 would occur without tax increment assistance in this district within 9 years. This finding is based upon evidence from general past experience with the high cost of acquisition and public improvements in the general area of the District (see Cashflow in Appendix D). 3. Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 1-28 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 Tax Increment Financing Plan for Tax Increment Financing District No. 1-28 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of Central Monticello Redevelopment Project No. I 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 the addition of a high quality development to the City.