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City Council Resolution 1999-63CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA Council member Herbst introduced the following resolution and moved its adoption: RESOLUTION NO. 99-63 RESOLUTION ADOPTING THE MODIFIED REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING WITHIN CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 TAX INCREMENT FINANCING DISTRICT NO. 1-26 AND ADOPTING THE RELATED 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 HRA has heretofore established Central Monticello Redevelopment Project No. 1 and adopted the Redevelopment Plan therefor. It has been proposed that the City adopt the Modified Redevelopment Plan for the Central Monticello Redevelopment Project No. 1 and establish Tax Increment Financing District No. 1-26 ("District No. 1-26") therein and adopt the 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 and has caused the Plans to be prepared.. 1.03. The City has performed all actions required by law to be performed prior to the establishment of District No. 1-26 and the adoption and approval of the proposed Plans, including, but not limited to, notification of Wright County and School District No. 882 having taxing jurisdiction over the property to be included in District No. 1-26, 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. Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The City is not modifying the boundaries of Central Monticello Redevelopment Project No. 1. 2.02. 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. Findings for the Establishment of Tax Increment Financing District No. 1-26. 3.01. The Council hereby finds that Tax Increment Financing District No. 1-26 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 District No. 1-26 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 District No. 1-26 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 District No. 1-26 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 Executive Director of the HRA. 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 District No. 1-26, 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 City of Monticello 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 District No. 1-26, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The 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 Thielen , and upon a vote being taken thereon, the following voted in favor thereof: Belsaas, Carlson, Herbst, Stumpf and Thielen. and the following voted against the same: Dated: October 25, 1999 (Seal) ATTEST: City Administrator EXHIBIT A RESOLUTION # The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-26, ("District No. 1-26") as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the District No. 1-26 is an economic development district as defined in M.S., Section 469.174, Subd. 12. Tax Increment Financing District No. 1-26 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. District No. 1-26 consists of a portion of Central Monticello Redevelopment Project No. 1 not meeting requirements for other types oftax increment financing districts, which is in the public interest because it will facilitate construction of an approximately 53,000 sf. manufacturing facility to be constructed in two phases 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 thepresent value of theprojected tax increments for the maximum duration of District No. 1-26 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 that meets the City's objectives for economic development. The cost of land acquisition, site improvements and utilities makes development of the facility infeasible without City assistance. 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). 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 improvements and utilities add to the total development cost. Historically, site development costs in this area have made development infeasible without tax increment assistance. Therefore, the City reasonably determines that no other development of any kind is anticipated on this site without substantially similar assistance being provided to the development. Accordingly, the increased market value anticipated without tax increment assistance is $0. A comparative analysis of estimated market values both with and without establishment of Tax Increment Financing District No. 1-26 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 District No. 1-26, the total increase in market value would be up to $971,003. The present value of tax increments from District No. 1-26 is estimated to be $201,992. It is the Council's finding that no development with a market value of greater than $769,010 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 , site improvements and public utilities in the general area of District No. 1-26 (see Cashflow in Appendix D). 3. Finding that the Tax Increment Financing Plan for District No. 1-26 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning Commission on October 5, 1999. The Planning Commission found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for District No. 1-26 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 District No. 1-26 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.