HRA Agenda 04-04-1985AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Thursday, April d, 1985 - 7:00 P.M.
Members: Chairman Gary Bieber, Bud Schrupp, Vic Vokaty, and
Ken Maus.
1. Call to Order.
2. Approval of Minutes of the March It. 1985, Meeting.
3. Consideration of Concept Approval and Use of Tax Increment
Financing for STD Proposal.
6. Consideration of Concept Approval and Use of Tax Increment
Financing for Beddor Proposal.
5. Consideration of Concept Approval and Use of Tax Increment
Financing for Northern Insulation Proposal.
6. Other Business.
7. Adjournment.
MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Monday, March 11, 1985 - 4:30 P.M.
Members Present: Chairman Gary wisber, Vic Vokaty, and Ken
Maus.
Chairman Gary wiebar opened the meeting asking for approval
of the February 7, 1985, minutes. Vic Vokaty moved to approve
said minutes, was seconded by Ken Maus, and passed 3-0. Chairmen
wieber announced the resignation of Jack Reeve and passed his
latter around. wiaber asked how this position was to be filled,
and Allen stated that a selection process would take place as
in the past with the Authority making a recommendation to the
Mayor for appointment.
Tom Eidem explained the assessment role and how it was arrived
at. He stated that there were three alternatives which included,
1) Assessing the project 100* to the property owners. This
was not a good option because it amounted to more than $200.00/toot.
2) This option was to assess at 20% under MS 429. Using this
figure, $78,000.00 would be assessable, and the tax increment
would not be enough to cover the costa. 3) Tom suggested assessing
approximately $150,000.00 and to even out the annual assessments.
He also stated that as Construction 5 completes their buildings
and the tax increment Is large enough to cover the debt, then
the City could abate portions of the future assessments. It
vas important to note that if no more construction is completed
by Construction 5, the assessments could be higher. Likewise,
if more construction is undertaken, then the assessments would
be lower. This is the rink they must undertake when they enter
into an agreement.
Tom stressed that the Lauring Lane extension of street, curb,
sewer, and water, eta., would be constructed to match the mixed
use. Part of the Improvement would match the existing rural
road construction of During Lane, and the remainder on Washington
and remainder of the northeast section will have curbing. He
also stated that the City will assess itself for the portion
of the park.
Ken Maus questlnnaA the c^f!9tnlCfl4n to De �ne=N..�M. Allan
indicated that the 18 -unit apartment building would be built
on Lot 1, Block 2, and the office/warehouse complex would be
located somewhat* on Lots 1-5, Block 1. Outlot A will be considered
for future development and may or may not be subdivided. An
example might be if the demand was present for additional office/
warehouse space, than they could build another offiea/warshouse
complex or nail to another developer.
BRA Minutes - I/11/85
Ren Maus asked about rd Doran -s thoughts on this project. Tom l
explained that if Cd made his own improvements, it would cost
approximately $50,000.00. But if the City made the improvements
to his property lines, he might be assessed approximately $20,000.00.
Mr. Doran realized it vas high, and Tom did not know how to
reduce it any further.
All curbing will surround Block 2 and on Fallon Avenue, essentially
the northeast section of this project area. Again. Tom stressed
that Lauring Lane would match the existing rural street construction,
while the remainder will have curbing.
Ren Maus inquired as to the Malone -s involvement in this, and
Tom indicated that just a portion of their property would have
to be purchased for location of the street extension. An a
result of this project, Mrs. Malone would have immediate access
from the improvement.
It was also explained that Construction 5 presently owns a triangular
piece of property located just north of the City's water reservoir
in Oakwood Industrial Park and south of 1-94. Plane are to
have Construction 5 transfer said property to the City and the
City will attach to Its reservoir property (Lot 5, Block 1,
Oakwood Industrial Park).
Ren Maus moved to approve and adopt the Tax Increment Finance J
Plan for the Construction 5 project and request the City Council
to met a public hearing for the purpose of establishing a Tax
Increment financing District. Vic Vokaty seconded the motion
and was passed 3-0.
Thera not being any further business, the meeting wan adjourned
by Chairman rieber.
Allen L. elvlt
Bxeoutive Secretary of BRA
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C,L
HAA Agenda - 4/4/85
3. Consideration of Concept Approval and Use of Tax Increment Financing
for STP Proposal. (A.P.)
A. REFERENCE AND BACKGROUND:
More than a year ago, we first came across a Norwegian snowplow
manufacturer who was negotiating in having MN/DOT teat their
plows in Minnesota winters. After testing six of the plows
throughout the 1983/84 winter months, the Norwegians convinced
MN/DOT to purchase the plows. During the summer months of 1984,
the Norwegians also sold plows to municipalities throughout
Minnesota. Monticello bought one of their plows and has had
good results with its performance. The Public Works Department
would consider purchasing another when needed.
At the same time they were testing the snowplows, another Norwegian
manufacturer was introducing a lightweight aluminum alloy 3 -ray
dump truck body. In fact, the Norwegians, along with the Minnesota
Trade Office, have proposed a project that would have the snowplow
and truck body companies act as a lead tenant in an "incubator"
or "greenhouse" operation. The proposal calls for STP (Scandinavian
Transport Products) to house approximately five other smaller
Norwegian firma that wish to enter the U.S. marketplace. This
"greenhouse" operation will house each firm until they reach
a point such as break even and then they can go out on their
own and another Scandinavian firm can take its place.
Of approximately 20 cities vying for this project, only two
remain--Monticollo and Hastings. We have boon in contact with
representatives from Norway, and they have indicated a preference
towards Monticello, although political pressures still have
Hastings as a contender.
AS of thin writing, staff ban begun preparing a proposal. The
initial specifications call for a 44,500 sq. ft. manufacturing
facility with approximately 2200 aq. ft. located on 10 acres
of industrial property. Preliminary estimates indicate that
the building will range from gi million to 41.6 million, while
the land will coat $170,000.00. We asked five local contractors/
developers to consider constructing and/or owning the property
with the intention of leasing space to STP.
OL the tivo contractors, 1 see only throe as being real contondoro.
The other two will be eliminated simply because the project
Is either too largo for them or they will not be competitive.
When we first informed those con troc tors/dovelope ro about the
project, we explained that the bottom lino woo constructing
a building and leasing it to STP without thinking of profit
during the flrut 3-5 years. Fluancial incentives such as Tax
50
BRA Agenda - 6/4/85
Increment Financing and Industrial Revenue Bonds will be available
to the developer. Once the beat proposal is presented, Mark Dayton's
office will help with financial assistance to help offset some
of the shortfalls. There is oven the possibility that our Authority's
money earmarked for development can be used if needed.
It is likely that 50 or more jobs would be created with this
project, it would increase the tax base by approximately $650,000.00
in assessed valuation, and would provide almost $55,000.00 annually
in taxes. This seems like a good project to get for Monticello,
and it is. However, the long range effects might be even greater.
For example, assume we have six firms in the greenhouse and
during 1986 three firms reach their break even point. At that
point, we have the advantage of hosting that firm in Monticello
and an inside track on helping that firm relocate within Monticello.
At the same time, a new firm will be filling the vacancy in
the greenhouse. Eldon Brustuen, the Director of the Trade Office,
has met with members of the Industrial Development Committeo
in regard to this project, and he is very high on it. His Trade
Office in becoming an international clearinghouse, as would
the "greenhouse.• When a foreign firm comes to the Minnesota
Trade Office and has questions or concerns about entering the
U.S. marketplace, they could bring them to Monticello'o project
to get a first hand look.
B. ALTERNATIVE ACTIONS:
1. Approve the proposed concept, authorize setting an HRA public
hearing to approve the TIF Plan and requesting the City
Council to sot a public hearing on the TIP Plan.
Z. Do not approve the proposal's concept. Thio would not kill
the entire project, but merely delay any actions until more
detailed information is available.
C. STAFF RECOMMENDATION:
We are not trying to go foot on thin project. We aro only trying
to got the Authority'o approval of the project and have it out
of the way no that staff can concentrate on the TIF Plan, IRH'o,
otc., ohouLd the project start to move factor. With Alternative 01
above, you approve the concept at thio meeting; and during the
next month(o). Staff obtaina firm financial numbaro and commitments
and at that time will prepare the TIF Plan for adoption. It
to otaff'o fooling that you approvo the concept (option 1) at
this month's meeting and await for STP'o choice of oitoo. At
that point, the TIP Plan can be worked on.
D. SUPPORTING DATA:
DTD concept strategy information, project opucificationo.
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RRA Agenda - 4/4/85
3. Consideration of Conceit Approval and Use of Tax Increment Financing
for STP Proposal. (A.P.)
A. REFERENCE AND BACKGROUND:
More than a year ago, we first came across a Norwegian snowplow
manufacturer who was negotiating in having MN/DOT Leet their
plows in Minnesota winters. After testing six of the plows
throughout the 1983/84 winter months, the Norwegians convinced
MN/DOT to purchase the plows. During the summer months of 1984,
the Norwegians also sold plows to municipalities throughout
Minnesota. Monticello bought one of their plows and has had
good results with its performance. The Public works Department
would consider purchasing another when needed.
At the same time they were testing the snowplows, another Norwegian
manufacturer was introducing a lightweight aluminum alloy 3 -way
dump truck body. In fact, the Norwegians, along with the Minnesota
Trade Office, have proposed a project that would have the snowplow
and truck body companies act as a lead tenant in an "incubator"
or "greenhouse" operation. The proposal calls for STP (Scandinavian
Transport Products) to house approximately five other smaller
Norwegian firma that wish to enter the U.S. marketplace. This
"greenhouse" operation will house each firm until they reach
a point such as break even and then they can go out on their
own and another Scandinavian firm can take its place.
Of approximately 20 cities vying for this project, only two
remain--Monticallo and Meetings. We have boon in contact with
representatives from Norway, and they have indicated a preference
towards Monticello, although political pressures still have
Hastings as a contender.
As of this writing, staff has begun preparing a proposal. The
initial specifications call for a 44,500 sq. ft. manufacturing
facility with approximately 2200 sq. ft. located on 10 acres
of industrial property. Preliminary ostimatoo indicate that
the building will range from 81 million to 81.6 million, while
the land will coot 8170,000.00. We asked five local contractors/
developers to consider constructing and/or owning the property
with the intention of leasing space to STP.
Of tho five contractors, 1 000 v„ly ttuaa au ::airy- real
The other two will be eliminated simply because the project
Lo either too large for them or they will not be competitive.
When we first informed these contractors/dovolopers about the
project, we explained that the bottom line was constructing
a building and leasing it to STP without thinking of profit
during the first 3-5 years. Financial incentives ouch as Tax
ME
HRA Agenda - 4/4/85
16- Increment Financing and Industrial Revenue Bonds will be available
to the developer. Once the beet proposal is presented, Mark Dayton's
office will help with financial assistance to help offset some
of the shortfalls. There is even the possibility that our Authority's
money earmarked for development can be used if needed.
e
It is likely that 50 or more jobs would be created with this
project, it would increase the tax base by approximately $650,000.00
in assessed valuation, and would provide almost $55,000.00 annually
in taxes. This seems like a good project to get for Monticello,
and it is. However, the long range effects might be even greater.
For example, assume we have six firms in the greenhouse and
during 1986 three firms reach their break even point. At that
point, we have the advantage of hosting that firm in Monticello
and an inside track on helping that firm relocate within Monticello.
At the same time, a new firm will be filling the vacancy in
the greenhouse. Eldon Brustuen, the Director of the Trade Office,
has met with members of the Industrial Development Committee
in regard to this project, and he is very high on it. His Trade
Office is becoming an international clearinghouse, as would
the *greenhouse." When a foreign firm comes to the Minnesota
Trade Office and has Questions or concerns about entering the
U.S. marketplaco, they could bring them to Monticello's project
to get a first hand look.
B. ALTERNATIVE ACTIONS:
1. Approve the proposed concept, authorize setting an HRA public
hearing to approve the TIF Plan and requesting the City
Council to set a public hearing on the TIP Plan.
9. Do not approve the propooal'a concept. This would not kill
the entire project, but merely delay any actions until more
detailed information is available.
C. STAFF RECOMMENDATION:
We aro not trying to go fast on this project. we are only trying
to got the Authority's approval of the project and have it out
of the way so that otaff can concentrate on the TIP Plan, IRB'a,
etc., should the project start to move faster. With Alternative 01
above, you approve the concept at this meeting; and during the
next month(s). ateff nhtelne farm f/nanNnl n.imh"n and co—it--crta
and at that time will prepare the TIP Plan for adoption. It
Is staff's fooling that you approve the concept (Option I) at
this month'o meeting and await for STP -0 choice of oitoo. At
that point, the TIP Plan can be worked on.
D. SUPPORTING DATA:
STP concept strategy information, project specifications.
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In
THE STPC CONCEPT STRATEGY
FOR INVITING NEW GROUPS OF CAREFULLY SELECTED COMPANIES
TO USE MINNESOTA AS AN ESTABLISHING AREA AND A SPRINGBOARD
TO THE REST OF THE US MARKET
STEPS IN TIIE STPC MARKETING PLAN.
IN MINNESOTA: 1. A Minnesota aid A assislnnee "parcel" to be put together.
using the STP Group as a,casc and an example; and thereafter
also made available to other Norwegian compnnics to follow.
1N NORWAY: Y. Forming of sew groups/joint ventures (like the STP -group)
consisting of carefully selected companies, based upon the
SBI- concept and manual.
IN MINNESOTA: 3. Market test period:
Each group to rent production and office facilities and
assistance in the STI' premises, until market possibilities
etc. have been satisfactory confirmed, e.g. until each group
reaches its Break -even -point.
At the end of this period the individual
Groups either decide to go back home or
to anther State, or proceed to step no. Is
t
4. Establishing period:
The Group establish own manufacturing facilities, and leave
the STP promises Mh(M aro then open for now groups to
cater their market tell period.
!. Each group in regular operation In their own promises.
Ibis strategy and concept could, be first tested out and applied on Groups from
Norway. Thereafter it could be applied, to attract similar groups from other
countries.
Vice versa the $101 -concept could be used to assist small & medium sized Minnesota
companies to establish outside Minnesoini I.e. Ie Europo or South Fast Asia.
PILOT PROJECT 0 MANUAL
ULLY
11,0.1.150TA 6REE14HOUSE
SPi-E rOR EXPANSION
/70
D
V
HRA Agenda - 4/4/85
4. Consideration of Concent ARproval and Use of Tax Increment Financinq
for Beddor Proposal. (A.P.)
A. REFERENCE AND BACKGROUND:
Some time ago, Wayne Bidwell of Beat in Webb entered negotiations
and just recently sold the business to Instant Webb of Chanhassen.
When Wayne was first negotiating with this group, they were
proposing a major (70-100,000 sq. ft.) plant for Maple Grove.
The exact location was at the intersection of I-694 and County
Road 18.
At that time, Wayne was to be in charge of physical plant layout,
equipment, and the authority to seek key employees. The Industrial
Development Committee met with Wayne and discussed the possibility
of locating the plant in Monticello. The results were negative.
Timing was a critical factor. The plant had to be completed
and operating by a certain date; and if they changed their plans,
the time frames could not have been met. They then stated that
in approximately 1 year another project was planned and perhaps
Monticello could make a proposal at that time.
I have kept in touch with Wayne Bidwell, and about 3-4 weeks
ago the business actually changed hands. That's when I learned
of the new plant. Initially, they will need 70,000 sq. ft.
and approximately 20 acres of land. They want to lease the
property for 5-10-15 years with the option to buy. The building
will be a concrete type similar to FBI. When the Industrial
Development Committee toured their operations in Chanhassen,
we were very impressed with the continuous expansion. One complex
started six years ago with 70-100,000 sq. ft. and presently
has approximately 600,000 sq. ft. This plant will expand in
the future, but probably not more than 250,000 sq. ft.
I have mot with the Baddora and received a cot of blueprints
for the Maple Grove plant. With a reduction in the square footage,
this cot of plane can be used for Monticello. The questions
we are looking for answers to aro: Now soon can it be ready
aisclueud and the tloor tinichod) for receiving printing
presses? And what is the rant/loase going to bo? I have provided
the plane to several area contractoro for their inspection
and anoworo to thooe quootiono. There aro empty buildingo
in the metro area in the 100,000 aq. ft. range that can be loaaod
for approximately 52.25/sq. ft. triple not. The Clow Stamping
building) is at 32.25 par sq. ft. but is not large enough.
The contractors I mor.tionod earlier have indicated that they
fool confidant of getting the building up in 60 dayo and sure
that they could do it in 90 days. This 60-75 day time frame
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BRA Agenda - 6/4/85
/ is critical because the presses are expected to be shipped around
the 15th of June. Even though we can meet the building deadline,
the lease amount will be higher than $2.25/sq. It. This is
due to the fact that it is new construction. I estimate the
lease amount to be approximately $3.50/sq. ft. for the manufacturing/
production area and $9.00/sq. ft. for the office area.
My estimate o1 the building will be: $1,300,000 - $1,750,000
for the building and $350,000 for the land. The total cost
should be in the $1,650,000 to $2,000,000 range. Based on this
information, it would provide $50,000 to $80,000 in tax increment
per year.
H. ALTERNATIVE ACTIONS:
1. Approve proposed concept, authorize setting an HRA public
hearing to approve TIP Plan and request the City Council
to not a public hearing on the TIP Plan.
2. Do not approve the proposal's concept and investigate tax
increment further. This would most likely kill the project
since it would raise the cost of the lease too much.
C. STAFF RP.COMENDATION:
This proposal is one that must have action taken at this meeting
or the project could be lost. I remind you that you are not
approving the Tax Increment Plan, but only the projects concept
and giving staff the authority to proceed to the next atop.
That next step would be coming back to the HRA with the Tax
Increment Plan and asking for its adoption. This could not
happen before 16 days after this meeting, 6/18/85, or at our
next meeting, 5/2/85. We recommend approval of the project's
concept and proceeding with the next phase of the Tax Increment
Finance phase.
D. SUPPORTING DATA:
Possible altos for project with land costs.
Z
HRA Agenda - 4/4/85
5. Consideration of Concept Approval and Use of Tax Increment Financinq
for Northern Insulation Proposal. (A. P.
A. REFERENCE AND BACKGROUND:
Last December Northern Insulation's building was destroyed by
fire. The insurance proceeds will not be released until they
construct another building. Their corporate office/plant is
In Gibbon, Minnesota with various projects and plants around
the country. The manufacturing operation is located in Elk
River and is currently housed in too small a facility. Adding
to the list of disadvantages is the transportation network and
utilities.
U.S. Highway 10 was a major 4 -lane in the past but is no longer.
The road has become something of a dinosaur for truckers. Other
problems include accessibility, load limits on other roads besides
010, and the condition of Highway 10. Mr. Johnson, President
of Northern Insulation, stated that trucks bringing in supplies
are usually over load limits, while those taking out supplies
are usually under load limits. This makes I-94/Highway 25 an
excellent location.
A second major problem exists at the Elk River location --electricity.
Elk River is served by a cooperative, and the rates are very
high. Northern Insulation in a high intensity user of electricity
�— becauco of the paper grinding machines. At present, their electricity
bills average $5,000-$7,000/month. Relocation has been a constant
thought for Northern Insulation; but every time they checked
into moving, the new location had high taxes and was ruled out.
Relocating to a city with a major transportation network, lover
utilities, and lover taxes would be beneficial to their operations.
Of course, Monticello has the answer to all throe of the above
needs.
After explaining what Monticello has to offer a business and
listening to Northern Insulations needs, the following could
be assumed: They need a minimum 10-20,000 sq. ft. building
(601 x 200') on 4-5 acres of land capable of handling 50-60
Z.,:iy. nawo i-pnaso electrical service and
a railroad siding/spur are also needed. Currently 15 people
work at the plant, but that could be increased to 20 by expanding
and rolo,;ating.
My estimates are that the building and land cost will range
from $275,000 to $725,000 and produce between $7,925 to $9,820
In tax increment each year. A rough guesstimate indicates that
we could write down the cost of the property by about 50% of
the original cost.
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NRA Agenda - 6/4/85
B. ALTERNATIVE ACTIONS:
1. Approve proposed concept authorizing setting an HRA public
hearing to approve TIP Plan and requesting the City Council
to set a public hearing on the TIP Plan.
2. Do not approve the proposed concept and authorize staff
to proceed with investigating preparation of a TIP Plan.
C. STAFF RECOMMENDATION:
We recommend giving concept approval and giving staff the ability
to proceed with the prospect and their proposal. Northern's
presentation lease is going to expire in July and could work
to our benefit, so approving this phase of the overall tax increment
process would be advantageous.
D. SUPPORTING DATA:
None at thin point.
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�"t- �2-�
A RESOLUTION BY THE MONTICELLO HOUSING
AND REDEVELOPMENT AUTHORITY APPROVING A
TAX INCREMENT FINANCING REDEVELOPMENT
DISTRICT PURSUANT TO MINNESOTA STATUTES,
SECTIONS 273.71 'rO 273.78 INCLUSIVE--AN--D--X
FINANCE PLAN FOR SAID TAX INCREMEN'r
FINANCING DISTRICT.
WHEREAS, The Housing and Redevelopment Authority in and for the City of
Monticello (the "Authority") is carrying out the Monticello Redevelopment Project
Modification #1 (the "Project") and Redevelopment Plan Modification 91 (the
"Plan"); and
WHEREAS, the Authority has determined that it is necessary to create a tax
increment financing district pursuant to Minnesota Statutes, Sections 273.71 to
273.78 inclusive, within the existing project, created and modified pursuant to
Minnesota Statutes, Section 462.411 et sEa„ the Minnesota Housing and
Redevelopment Act; and
WHEREAS, the Authority recommends that the project be undertaken as
rapidly as possible and be financed with local funds including tax increment
financing as authorized by Minnesota Statutes, Sections 273.71 through 273.78; and
WHEREAS, there was presented to this meeting of the governing body of the
Authority for Its consideration and approval, a copy of a tax increment plan for the
project area described in said plan dated March, 1985 which plan is entitled The
Construction Five Development Proposal; and
WHEREAS, the Authority has submitted the tax increment financing plan to
the City Planning Commission of the City of Monticello (the "Planning
Commission") for its review and opinion; and
NOW, THEREFORE, BE IT RESOLVED by the governing body of the Housing
and Redevelopment Authority in and for the City of Monticello:
The proposed development or redevelopment, In the opinion of the
city, would not reasonably be expected to occur solely through
private investment within the reasonably foreseeable future and,
therefore, the use of tax Increment financing Is deemed necessary
since Construction Five could not economically construct the present
facility without the provision of the necessary public Improvements
to the site and without the use of tax increments to assist with the
financing of these public Improvements, the aevetoper would not iwve
constructed the apartment building and manufacturing facility In the
City; and
'rhe tax increment financing plan will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the
development by private enterprise as It will enable the City to
provide the necessary public Improvements for development; thereby
encouraging redevelopment in the area.
3. The tax increment financing plan conforms to the general plan for
the development of the city as a whale as it will result in
construction of an apartment building and a manufacturing facility
which will provide needed housing, create new jobs and increase the
tax base of the City.
4. The tax increment district to be established is a redevelopment
district pursuant to Minnesota Statutes, Section 273.73, Subdivision
10(aM3) in which the conditions described in Section E of this plan
ex ist.
The Housing and Redevelopment Authority of Monticello, Minnesota does
hereby approve the tax increment financing plan and the creation of a tax
increment financing district as described in said tax increment financing plan and
does hereby transmit to the City Council the plan for their adoption.
Adopted by the Housing and Redevelopment Authority this 11th day of
March, 1985.
ATTEST:
/Chairmen
THS MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
TAR INCREMENT FINANCING PLAN
(MWrA9*ta Statutes. SWUoa 473.71 tO 3TLT9)
for
THE CONSTRUCTION FIVE DEVELOPMENT PROPOSAL
Dates MaraN 1995
TABLE OF CONTENTS
PART 11 TAX INCREMENT REDEVELOPMENT DISTRICT FINANCE PLAN
Section A.
Statutory Authority 1
Section B.
Statement of Objectives 1
Section C.
Development Program 1
Section D.
Description of Property in Tax
Increment Financing District 2
Section E.
Classification of the Tax Increment
Financing District 2
Section F.
Parcels in Acquisition 2
Section G.
Estimate of Costs 3
Section H.
Estimated Amount of Loan/Bonded
Indebtedness 3
Section 1.
Sources of Revenue 3
Section J.
Original Assessed Value 4
Section K.
Estimated Captured Assessed Value 4
Section L.
Duration of the District 4
Section M.
Estimated Impact on Other
Taxing Jurisdictions S
Section N.
Modifications of the Tax Increment
Financing District B
Section O.
Limitation on Administrative Expenses 8
Section P.
Limitation on Duration of Tax
Increment Financing Districts 7
Section Q.
Limitation on Qualification of Property
in Tax Increment District Not Subject
to Improvement 7
Section R.
Limitation on the Use of Tax Increment 7
Section S.
Notification of Prior Planned Improvements 8
Section T.
Excess Tax Increments 8
Section U.
Requirement for Agreements with
the Developer 8
Section V.
Assessment Agreements 8
Section W.
Administration of the Tax Increment
Financing Redevelopment District and
Maintenance of the Tax Increment Account 9
Section X.
Annual Disclosure Requirements 9
Section Y.
Assumptions 10
Section Z.
Municipal Findings 10
Tax increment Redevelopment District Finance Plan
A. Statutory Authority
The Monticello Housing and Redevelopment Authority (the "Authority') and
the City of Monticello are authorized to establish a tax increment district
pursuant to Minnesota Statutes, Section 273.71-78.
B. Statement of Objectives
1. To provide opportunities for development and expansion of new
business;
2. To provide employment opportunities through the creation of new
jobs;
3. To provide opportunities for growth in the tax base;
4. To assist with street construction, sanitary sewer and watermain
construction, storm sewer and other public Improvements to
encourage redevelopment In the area.
5. To encourage the development of additional rental housing in the
City.
C. Development Program
1. Description of the Development Activities:
Construction Five (the "Developer") plans to construct an 18 -unit
apartment building and a 25,000 sq. ft. manufacturing facility. Mixed
use zoning standards In the City provide for these developments
which will be located near the highway in an area that encompasses
both light industrial and residential uses. The developer will be
assisted with public Improvements to service the buildings with tax
Increment revenues. Both buildings are expected to complete
construction in 1985.
2. Other Development Not Under Contract Reasonably Expected to
Occur in the Project:
lite development program may include a tuture oltice building
located in the tax increment redevelopment district. The
geographical boundaries of the district are not expected to change
due to this development.
d
D. Description of Property in the Tax Increment Financing District
Based on discussions with the City Assessor, the replat to be filed for the
tax increment district will be legally described as follows:
Lot 1, Block 2, Outlot A, and Lots 1, 2, 3, 4, 5, Block 3, Construction
Five Addition, Monticello, Minnesota
A map revealing the location of the parcels within the project is provided on
the following page.
E. Classification of the Tax increment Financing District
The Monticello City Council and Housing and Redevelopment Authority in
determining the need to create a tax increment financing district in
accordance with Minnesota Statutes, Section 273.71-78 inclusive, find that
the district to be established is a redevelopment district pursuant to
Minnesota Statutes, Section 273.73, Subdivision 10(aX3). Less than seventy
percent or the parcels in the district are occupied by buildings, streets,
utilities, or other improvements, but due to unusual terrain or soil
deficiencies requiring substantial filling, grading or other physical
preparation for use at least 80 percent of the total acreage of such land has
a fair market value upon inclusion in the redevelopment district which, when
added to the estimated cost of preparing that land for development,
excluding costs directly related to roads as defined in Minnesota Statutes,
Section 180.01 and local improvements as described (n—Te-c-Moon ,
Subdivision 1, clauses 1 to 7, 11 and 12, and Section 430.01, if any, exceeds
its anticipated fair market value after completion of said preparation;
provided that no parcel shall be included within a redevelopment district
unless the authority has concluded an agreement or agreements for the
development of at least 50 percent of the acreage having the unusual soil or
terrain deficiencies, which agreement provides recourse for the authority
should the development not be completed. Since, of the parcels proposed to
be placed Into a tax increment district, less than seventy percent are
occupied by buildings, streets, utilities or other Improvements, and the
total acreage (80 percent or more) of the area has a fair market value when
added to the estimated cost of preparing the land for use exceeds its
anticipated fair market value after completion of the preparations,
excluding costs directly related to roads and local improvements, and a
development agreement for at least 50 percent of the acreage having the
unusual soil deficiencies and including recourse for the City should the
development not be completed, will have been concluded, prior to bond sale,
the area qualifies as a redevelopment district.
'Rte description of the parcels that have been used to establish eligibility es
a redevelopment district are described below.
Lot 1, Block 2, Outlot A. and Lots 1, 2, 3, 4, 5, Block 3, Construction
Five Addition, Monticello, Minnesota
Parcels In Acquisition
No parcels are scheduled to be acquired by the City at the present time.
THE MONTICELLO HOUSING AND REDEYELOPNMNT AUTHORITY
TAR IICRRMRNT FINANCING PLAN
(e bumota Statutes, Section 273.71 to 2ILT9)
for
THE CONSTRUCTION FIVE DEVELOPMENT PROPOSAL
Dater mxmI6 1095
TABLE OF CONTENTS
PART 11 TAX INCREMENT REDEVELOPMENT DISTRICT FINANCE PLAN
Section A.
Statutory Authority 1
Section B.
Statement of Objectives I
Section C.
Development Program 1
Section D.
Description of Property in Tax
Increment Financing District 2
Section E.
Classification of the Tax Increment
Financing District 2
Section F.
Parcels in Acquisition 2
Section G.
Estimate of Costs 3
Section H.
Estimated Amount of Loan/Bonded
Indebtedness 3
Section L
Sources of Revenue 3
Section J.
Section K.
Original Assessed Value i
Estimated Captured Assessed Value Z
Section L.
Duration of the District i
Section M.
Estimated Impact on Other
Taxing Jurisdictions 5
Section N.
Modifications of the Tax Increment
Financing District 8
Section O.
Limitation on Administrative Expenses 9
Section P.
Limitation on Duration of Tax
Increment Financing Districts 7
Section Q.
Limitation on Qualification of Property
In Tax Increment District Not Subject
to Improvement 7
Section R.
Limitation on the Use of Tax Increment 7
Section S.
Notification of Prior Planned Improvements 8
Section T.
Excess Tax Increments 8
Section U.
Requirement for Agreements with
the Developer 8
Section V.
Assessment Agreements 8
Section W.
Administration of the Tax Increment
Financing Redevelopment District and
Maintenance of the Tax Increment Account 9
Section X.
Annual Disclosure Requirements 9
Section Z.
Municipal Findings 10
Tax Increment Redevelopment District Finance Plan
A. Statutory Authority
The Monticello Housing and Redevelopment Authority (the "Authority") and
the City of Monticello are authorized to establish a tax increment district
pursuant to ,Minnesota Statutes, Section 273.71-76.
B. Statement of Objectives
1. To provide opportunities for development and expansion of new
business;
2. To provide employment opportunities through the creation of new
jobs;
3. To provide opportunities for growth in the tax base;
i. To assist with street construction, sanitary sewer and watermain
construction, storm sewer and other public improvements to
encourage redevelopment in the area.
5. To encourage the development of additional rental housing in the
ti City.
C. Development Program
1. Description of the Development Activities:
Construction Five (the "Developer") plans to construct an 18 -unit
apartment building and a 25,000 sq. ft. manufacturing facility. Mixed
use zoning standards in the City provide for these developments
which will be located near the highway in an area that encompasses
both light Industrial and residential uses. The developer will be
assisted with public improvements to service the buildings with tax
Increment revenues. Both buildings are expected to complete
construction in 1065.
2. User Devulupment Not binder wntiaet Expected to
Occur in the Project:
The development program may Include a future office (wilding
located In the tax increment redevelopment district. The
geographical boundaries of the district are not expected to change
due to this development.
0
D. Description of Property in the Tax Increment Financing District
Based on discussions with the City Assessor, the replat to be filed for the
tax increment district will be legally described as follows:
Lot 1, Block 2, Outlot A, and Lots 1, 2, 3, 4, 5, Block 3, Construction
Five Addition, Monticello, Minnesota
A map revealing the location of the parcels within the project is provided on
the following page.
E. Classification of the Tax Increment Financing District
The Monticello City Council and Housing and Redevelopment Authority In
determining the need to create a tax increment financing district in
accordance with Minnesota Statutes, Section 273.71-78 inclusive, find that
the district to be established is a redevelopment district pursuant to
Minnesota Statutes, Section 273.73, Subdivision l0(a)(3). Less than seventy
percent of the parcels in the district are occupied by buildings, streets,
utilities, or other improvements, but due to unusual terrain or soil
deficiencies requiring substantial filling, grading or other physical
preparation for use at least 80 percent of the total acreage of such land has
a fair market value upon inclusion in the redevelopment district which, when
added to the estimated cost of preparing that land for development,
excluding costs directly related to roads as defined In Minnesota Statutes,
Section 180.01 and local improvements as described in Section ITT.1,
Subdivision 1, clauses 1 to 7, 11 and 12, and Section 430.01, if any, exceeds
its anticipated fair market value after completion of said preparation;
provided that no parcel shall be included within a redevelopment district
unless the authority has concluded an agreement or agreements for the
development of at least 50 percent of the acreage having the unusual soil or
terrain deficiencies, which agreement provides recourse for the authority
should the development not be completed. Since, of the parcels proposed to
be placed into a tax increment district, less than seventy percent are
occupied by buildings, streets, utilities or other Improvements, and the
total acreage (80 percent or more) of tho area has a fair market value when
added to the estimated cost of preparing the land for use exceeds Its
anticipated fair market value after completion of the preparations,
excluding costs directly related to roads and local Improvements, and a
development agreement for at least 80 percent of the acreage having the
unusual soil deficiencies and including recourse for the City should the
development not be completed, wiU have been concluded, prior to bond sale,
the area quniiiies as a redtivuluyweilt distfl.t.
The description of the parcels that have been used to establish eUgibility as
a redevelopment district are described below.
Lot 1, Block 2, Outlot A, and Lots 1, 2, 3, 4, 5, Block 3, Construction
Five Addition, Monticello, Minnesota
Parcels in Acquisition
No parcels are scheduled to be acquired by the City at the present time.
CONSTRUCTION 5 ADDITION
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Estimate of Costs
The estimate of public costs associated with the tax increment financing
redevelopment district are outlined in the following line item budget.
BUDGET
Street Construction
$127,500
Sanitary Sewer and Watermain
116,500
Storm Sewer
57,300
Attorney Fees
7,600
Issuance Costs
15,190
Allowance for Discount
7,410
'Capitalized Interest
58,500
390,000
*The amount of capitalized interest will be equal to an amount sufficient to
pay interest on the bands from the date of issue until the date of collection
of sufficient tax increment revenue to meet scheduled Interest payments
when due, but not exceeding S years as required by Minnesota statutes,
Chapter 475. Predicting capitalized interest prior to Issuance is extremely
difficult as It is a function of interest rates, construction schedules and tax
timing; therefore, the above figure is only an estimate of capitalized
interest and is subject to change.
Estimated Amount of Loan/Bonded Indebtedness
An estimate of the amount of bonded indebtedness is expected to be
$390,000. The term of the issue is 20 years and the interest rale is expected
to be 9 percent. The amount of two and one-half to three years capitalized
interest is estimated to be $58,500. Debt service on the bond will be met
through a combination of tax increment revenues, tax levies and assessment
income.
Sources of Revenue
There are several sources of revenue to be used to finance public costs
associated with the development projects within the redevelopment project.
Tho majority of the public costs are to be paid with tax Increment revenues
in eomotnation with special assessments and a tax levy. The tax increment
is generated as a result of the taxation of the land and improvements in the
tax increment redevelopment district. Tax Increment financing refers to a
funding technique that utilizes increases in assessed valuation and the
property taxes attributed to new development to finance, or assist in the
financing of public development costs. The facilities are expected to be
fully assessod beginning in 1986 at which time the development will
generate an annual tax Increment of $25,000 collectable in 1987. The tax
increment estimate for 1987 is based union the assumption that botTi t tF�
apartment building and manufacturing facility are fully completed In 19a5
and fully assossed on January 2, 190. A partial nesessment in 1989 will
Produce a partial tax increment oavment in 1987.
Original Assessed Value
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 1 and Section
273.76, Subdivision 1, the Original Assessed Value (OAV) for the City of
Monticello tax increment financing redevelopment district is based on the
value placed on the property by the County Assessor In 1984. This assessed
value is $13,960 based on the replat to be filed with the County. Each year
the Office of the County Auditor will measure the amount of increase or
decrease in the total assessed value of the tax increment redevelopment
district to calculate the tax increment payable to the Monticello
redevelopment district fund. In any year in which there is an Increase In
total assessed valuation in the tax increment redevelopment district above
the adjusted original assessed value, a tax increment will be payable. In any
year in which the total assessed valuation in the tax increment financing
redevelopment district declines below the original assessed valuation, no
assessed valuation will be captured'and no tax increment will be payable.
The County Auditor shall certify in each year after the date the Original
Assessed Value was certified, the amount the OAV has Increased or
decreased as a result of:
1. change in tax exempt status of property;
2. reduction or enlargement of the geographic boundaries of the
district;
3, change due to stipulations, adjustments, negotiated or court-ordered
abatements.
K. Estimated Captured Assessed Value
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 1 and Minnesota
Statutes, Section 273.76, Subdivision 2, the estimated Captured
elue CAV) of the tax increment financing redevelopment district will
annually approximate $306,670. It is expected that the estimated $306,670
will be captured as a result of the improvements to be constructed by
Construction Five. 'Reis amount will be captured for up to twenty-five years
or until the project debt is retired. 'Me Authority requests 100 percent of
the available increase in assessed value for repayment of debt and current
expenditures.
L. Duration of the District
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 1, the duration
of the tax Incroment distrit within the Redevelopment Project must be
Indicated within the finance plan. no duration of the tax Increment
district will be 25 years from the date of receipt of the first tax Increment.
Thus, it is estimated that the tax Increment district, Including any
modifications to the finance plan for subsequent phases or other changes,
would torminato twenty-five years from the collection of the first tax
increment.
N. Estimated Impact on Other Taxing Jurisdictions
The impact of the loss of tax dollars represented as tax increments is
estimated below for each taxing jursidiction. This estimate is based on the
existing redevelopment proposals and does not include the possible tax
increments derived from any other future development, mill changes, or
inflation factors.
Total Assessed Value
Tax Increment Finance District 1/2/84 Total $ 13,960
IAtest Assessed Value of Each Government Body:
% of District
to Total
Wright County S 358,798,000 .00004
School District #882 101,128,476 .0001
City of Monticello 79,954,554 .0002
Other 115,919,820 .0001
Considering all the districts, it can be seen from the above that the school,
city and county districts will have over 99% of each respective district
available for normal growth of tax base or valuation. Applying the
percentage of the total mill rate in 1985 levied by each taxing jurisdiction
to the projected mill rate and the estimated tax increment received reveals
the annual loss of tax dollars by each taxing jurisdiction as listed In the
table below assuming development would occur without public assistance.
The finance plan indicates we anticipate a tax Increment at build out as
fouuws:
Captured Assessed Estimated Tax
Valuation Increment Received
Tax Increment Finance District $300,670 $ 25,000
Based on the current mill rale, the estimated taxes received would be as
follows for the taxing bodies:
mills Percent Tax bwrement
City 18.874 23.2 $ 5,803
County 19.719 24.2 6,063
School District #882 39.714 48.9 12,212
Other 2.998 3.7 922
Total 81.305 100.0% $25,000
The following table represents the additional mills that would have to be
lovied to compensate for the loss of tax dollars in estimated tax increments
for each taxing jurisdiction. The tax increments derived from the
manufacturing facility and housing alluded to in the tax increment district
would not be available to any of the taxing jurisdictions were it not for
public intervention by the Authority. Although the Increases in assessed
value due to development will not be available for the application of the
mill levy for the duration of the tax increment financing district, this new
assessed value could eventually permit a mill levy decrease. If it could be
assumed that the captured assessed value was available for each taxing
jurisdiction, the non -receipt of tax dollars represented as tax increments
may be determined. This determination is facilitated by estimating how
much the mill levy for property outside of the tax increment financing
district would have to be increased to raise the same amount of tax dollars
in each taxing jurisdiction that would be available if the projects occurred
without the assistance of the Authority.
Adjusted• Required Tax
Assessed Value Mills Increment
School District 101,114,516 .121 t 12,212
County 358,784,040 .017 6,063
City 79,940,594 .073 5,803
*Tax Increment District assessed valuation subtracted.
Modifications of the Tax increment Financing District
In accordance with Minnesota Statutes, Section 273.74, Subdivision 4, any
reduction or enlargement oT t ire geographic area of the project or tax
increment financing district, increase in amount of bonded indebtedness to
be incurred, including a determination to capitalize Interest on debt if that
determination was not a part of the original plan, or to increase or decrease
the amount of interest on the debt to be capitalized, increase In the portion
of the captured assessed value to be retained by the Authority, increase In
total estimated tax Increment expenditures or designation of additional
property to be acquired by the authority shell be approved upon the notice
and after the discussion, public hearing and findings required for approval of
the original plan. The geographic area of a tax Increment financing district
may be reduced, but shall not be enlarged after five years following the date
of certification of the original assessed value by the county auditor. no
tax increment financing redevelopment district may therefore be expanded
until 1990.
Limitation on Administrative Expenses
In accordance with Minnesota Statutes, Section 273.73, Subdivision 13 and
Minnesota Statutes,SecT�7�Subdivision 3, administrative expenses
means W e � iiures of an authority other than amounts paid for the
purchase of land or amounts paid to contractors or others providing
materials and services, including architectural and engineering services,
directly connected with the physical development of the real property in the
district, relocation benefits paid to or services provided for persons residing
or businesses located in the district or amounts used to pay Interest on, fund
a reserve for, or sell at a discount bonds Weed pursuant to Section 273.77.
Administrative expenses Includes amounts paid for services provided by bond
counsel, fiscal consultants, and planning or economic development
consultants. No tax increment shall be used to pay any administrative
expenses for a project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment financing plan or the total tax
increment expenditures for the project, whichever is less.
Limitation on Duration of Tax Increment Financing Districts
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 1, "no tax
increment shall be paid to an authority three years from the date of
certification by the County Auditor unless within the three-year period (1)
bonds have been issued pursuant to Section 273.77 or in aid of a project
pursuant to any other law, except revenue bonds issued pursuant to Chapter
374. prior to the effective date of the Act; or (2) the authority has acquired
property within the district; or (3) the authority has constructed or caused
to be constructed public improvements within the district ... " The City or
Authority must therefore issue bonds, or acquire property, or construct or
cause public improvements to be constructed by 1988 or the Office of the
County Auditor may dissolve the tax increment financing district.
Q. Limitation on Qualification of Property in Tax Increment District Not
Subject to Improvement
Pursuant to Minnesota Statutes Section 273.75, Subdivision 8, "if, after four
years from the date of certification of the original assessed value of the tax
increment financing district ..., no demolition, rehabilitation or renovation
of a parcel or other site preparation Including Improvement of a street
adjacent to a property but not Installation of utility service including sewer
or water systems, has been commenced on a parcel located within a tax
Increment financing district by the authority or by the owner of the parcel
in accordance with the tax Increment financing plan, no additional tax
Increment may be taken from that parcel and the original assessed value of
that parcel shall be excluded from the original assessed value of the tax
Increment financing district. If the authority or the owner of the parcel
subsequently commences demolition, rehabilitation or renovation or other
site preparation on that parcel including improvement of a street adjacent
to that parcel, in accordance with the tax Increment financing plan, the
authority shall certify to the county auditor In the annual disclosure report
that the activity has commenced. The county auditor shall certify the
assessed value thereof as most recently certified by the commissioner of
revenue and add It to the original assessed value of the tax increment
financing district.
Limitation on the Use of Tax Increment
All revenues derived from tax Increment shell be used In accordance with
the tax Increment financing plan. no revenues shell be used to finance or
otherwise pay public redevelopment costs pursuant to Minnesota Statutes,
Chapter 472A. These revenues shall not be used to circumvent existingTy
limit taw. No revenues derived from tax Increment shall be used for the
construction or renovation of a municipally owned building used primarily
and regularly for conducting the business of the municipality; this provision
shall not prohibit the use of revenues derived from tax Increments for the
construction or renovation of a parking structure, a commons area used as a
public park or a facility used for social, recreational or conference purposes
and not primarily for conducting the business of the municipality.
S. Notification of Prior Planned Improvements
Pursuant to Minnesota Statutes Section 273.76, Subdivision S, the Authority
has reviewed and searched the properties to be included in the tax
increment financing redevelopment district and found no properties for
which building permits have been issued during the 18 months immediately
preceding approval of the tax increment financing plan by the city. If the
building permit had been issued within the 18 month period preceding
approval of the tax increment financing plan by the city, the county auditor
shall increase the original assessed value of the district by the assessed
valuation of the improvements for which the building permit was issued,
excluding the assessed valuation of improvements for which a building
permit was Issued during the three month period Immediately preceding said
approval of the tax increment financing plan, as certified by the assessor.
T. Excess Tax Increments
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 2, in any year in
which the tax increment exceeds the amount necessary to pay the costs
authorized by the tax increment plan, including the amount necessary to
cancel any tax levy as provided In Minnesota Statutes, Section 475.61,
Subdivision 3, the Authority shall use the excess amount to:
1. prepay the outstanding bonds;
2. discharge the pledge of tax increment therefore;
3. pay into an escrow account dedicated to the payment of such bond;
4. repay any loans Including interest on these loans; or
5. return the excess to the County Auditor for redistribution to the
respective taxing jurisdictions In proportion to their mill rate.
U. Requirement for Agreements with the Developer
Pursuant to Minnesota Statutes Section 273.75, Subdivision 5, no more that
25 percent by acreaga�� property to be acquired by the Authority
within a project which contains a In the redevelopment district shell be
owned by the Authority as a result of acquisition with the proceeds of buds
Issued pursuant to Section 273.77 without the Authority having prior to
acquisition In excess of 25 percent of the acreage, concluded an agreement
for the development of the property acquired and which provides recourse
for the Authority should the development not be completed. See Section 6
for the development agreement requirement due to moll deficiencies.
V. Assessment Agreements
Pursuant to Minnesota Statutes Section 273.76, Subdivision 8, the Authority
may, upon entering Into a devolopment agreement pursuant to Minnesota
Statutes Section 273.75, Subdivision 5, enter into an agreement in
recordable form with the developer of property within the tax increment
financing district which establishes a minimum market value of the land and
completed improvements for the duration of the tax increment
redevelopment district. The assessment agreement shall be presented to the
county assessor who shall review the plans and specifications for the
improvements to be constructed, review the market value previously
assigned to the land upon which the Improvements are to be constructed and
so long as the minimum market value contained in the assessment
agreement appears in the judgment of the assessor, to be a reasonable
estimate, the assessor may certify the minimum market value agreement.
N. Administration of the Tax Increment Financing Redevelopment District and
Maintenance of the Tax Increment Account
Administration of the tax increment financing redevelopment district will
be handled by the Executive Director of the Authority and the Office of the
City Administrator.
The tax increment received as a result of increases in the assessed value of
the tax increment financing redevelopment district will be maintained in a
special account separate from oil other municipal accounts and expended
only upon sanctioned municipal activities identified in the finance plan.
X. Annual Disclosure Requirements
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 5, an authority
must file an a� scld(-osure report for all tax increment financing
districts. The report shall be filed with the school board, county board and
the Minnesota Department of Energy and Economic Development. The
report shall Include the following Information:
1. The amount and source of revenue In the account;
2. The amount and purpose of expenditures from the accountl
3. The amount of any pledge of revenues, including principal and
Interest on any outstanding bonded indebtedness;
4. The original assessed value of the district;
5. trio captured assessed value retained by the authority;
6. The captured assessed value shared with other taxing distrieta;
7. Tho tax increment received.
The annual disclosure report is designed to be a two-way medium of
information dissemination for both the Office of the County Auditor and the
Authority. Should the auditor want additional Information from the
Authority regarding its tax increment financing activities, such Information
should be requested prior to submission of the annual disclosure report by
the Authority. Similarly, the city council may utilize the annual disclosure
report as a means for requesting information from the Office of the County
Auditor.
Additionally, the Authority must annually publish a statement in a
newspaper of general circulation in the municipality showing the tax
increment received and expended in that year, the original assessed value,
the captured assessed value, amount of outstanding bonded indebtedness and
any additional information the city deems necessary.
Y. Assumptions
It was necessary to make certain assumptions regarding Income, costs and
timing of the tax increment redevelopment district. These assumption are
based on discussions with Authority, County, and fiscal consultant staff.
Z. ,Municipal Findings
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 3, before or at
the time of approval of the tax Increment financing plan, the municipality
shall make the following findings and shall set forth in writing the reasons
and supporting facts for each determination:
The proposed development or redevelopment, in the opinion of the
city, would not reasonably be expected to occur solely through
private investment within the reasonably foreseeable future and,
therefore, the use of tax increment financing is deemed necessary
since Construction Five could not economically construct the present
facility without the provision of the necessary public Improvements
to the site and without the use of tax Increments to assist with the
financing of these public Improvements, the developer would not have
constructed the apartment building and manufacturing facility in the
City; and
2. The tax Increment financing plan will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the
development by private enterprise as It will enable the City to
provide the necessary public Improvements for development; thereby
encouraging redevelopment in the area.
3. 'Me tax Increment financing plan conforms to the general plan for
the development of the city as a whole as It will result in
construction of nn apartment building and a manufacturing facility
which will provide needed housing, create now jobs and increase thu
tax baso of the City.
'rho tax increment district to be established Is a redevelopment
district pursuant to Minnesota Statutes, Section 273.73, Subdivision
10(a)(3) In which the con ons--3escrNod In Section E of this plan
exist.
to
A RESOLUTION BY THE MONTICELLO HOUSING
AND REDEVELOPMENT AUTHORITY APPROVING A
TAX INCREMENT FINANCING REDEVELOPMENT
DISTRICT PURSUANT TO MINNESOTA STATUTES,
SECTIONS 273.71 TO 273.78 INCLUSIVE AND A
FINANCE PLAN FOR SAID TAX INCREMENT
FINANCING DISTRICT.
WHEREAS, The Housing and Redevelopment Authority in and for the City of
Monticello (the "Authority') is carrying out the Monticello Redevelopment Project
Modification 01 (the "Project") and Redevelopment Plan Modification 01 (the
"Plan"); and
WHEREAS, the Authority has determined that it is necessary to create a tax
increment financing district pursuant to Minnesota Statutes, Sections 273.71 to
273.78 inclusive, within the existing project, created and modified pursuant to
Minnesota Statutes, Section 462.411 et sc�c„ the Minnesota Housing and
Redevelopment Act; and
WHEREAS, the Authority recommends that the project be undertaken as
rapidly as possible and be financed with local funds including tax increment
financing as authorized by Minnesota Statutes, Sections 273.71 through 273.78; and
WHEREAS, there was presented to this meeting of the governing body of the
Authority for its consideration and approval, a copy of a tax increment plan for the
project area described in said plan dated March, 1985 which plan is entitled The
Construction Five Development Proposal; and
WHEREAS, the Authority has submitted the tax Increment financing plan to
the City Planning Commission of the City of Monticello (the "Planning
Commission") for Its review and opinion; and
NOW, THEREFORE, BE IT RESOLVED by the governing body of the Housing
and Redevelopment Authority in and for the City of Monticello;
The proposed development or redevelopment, In the opinion of the
city, would not reasonably be expected to occur solely through
private Investment within the reasonably foreseeable future and,
therefore, the use of tax increment financing is deemed necessary
since Construction Five could not economically construct the present
facility without the provision of the necessary public Improvements
to the site and without the use of tax increments to assist with the
financing of these public improvements, the developer would not have
eonstructed the apartment building and manufae.ttiring facility In the
City; and
The tax increment financing plan will afford maximum opportunity,
consistent with the sound needs of the City as o whole, for the
development by private enterprise as It will enable the City to
provide the necessary public improvements for development; thereby
encouraging redevelopment In the area.
3. The tax increment financing plan conforms to the general plan for
the development of the city as a whole as It will result in
construction of an apartment building and a manufacturing facility
which will provide needed lousing, create new jobs and increase the
tax base of the City.
4. The tax increment district to be established is a redevelopment
district pursuant to Minnesota Statutes. Section 273.73, Subdivision
10(aX3) in which the conditions described in Section E of this plan
exist.
'Rhe Housing and Redevelopment Authority of Monticello, Minnesota does
hereby approve the tax increment financing plan and the creation of a tax
increment financing district as described in said tax increment financing plan and
does hereby transmit to the City Council the plan for their adoption.
Adopted by the Housing and Redevelopment Authority this day of
March, 1985.
ATTEST:
Chairman
[PIN
A RESOLUTION BY THE MONTICELLO HOUSING
AND REDEVELOPMENT AUTHORITY APPROVING A
TAX INCREMENT FINANCING REDEVELOPMENT
DISTRICT PURSUANT TO MINNESOTA STATUTES,
SECTIONS 273.71 TO 273.78 INCLUSIVE AND A
FINANCE PLAN FOR SAID TAX INCREMENT
FINANCING DISTRICT.
WHEREAS, The Housing and Redevelopment Authority in and for the City of
Monticello (the "Authority") is carrying out the Monticello Redevelopment Project
Modification #1 (the "Project") and Redevelopment Plan Modification Al (the
"Plan"); and
WHEREAS, the Authority has determined that it is necessary to create a tax
increment financing district pursuant to Minnesota Statutes, Sections 273.71 to
273.78 inclusive, within the existing project, created and modified pursuant to
Minnesota Statutes, Section 462.411 et sec„ the Minnesota Housing and
Redevelopment Act; and
WHEREAS, the Authority recommends that the project be undertaken as
rapidly as possible and be financed with local funds including tax increment
financing as authorized by Minnesota Statutes, Sections 273.71 through 273.78; and
WHEREAS, there was presented to this meeting of the governing body of the
Authority for its consideration and approval, a copy of a tax increment plan for the
project area described in said plan dated March, 1985 which plan is entitled The
Construction Five Development Proposal; and
WHEREAS, the Authority has submitted the tax increment financing plan to
the City Planning Commission of the City of Monticello (the "Planning
Commission") for Its review and opinion; and
NOW, THEREFORE, BE IT RESOLVED by the governing body of the Housing
and Redevelopment Authority in and for the City of Monticello:
The proposed development or redevelopment, In the opinion of the
city, would not reasonably be expected to occur solely through
private investment within the reasonably foreseeable future and,
therefore, the use of tax Increment financing is deemed necessary
since Construction Five could not economically construct the present
facility without the provision of the necessary public Improvements
to the site and without the use of tax increments to assist with the
financing of these public Improvements, the developer would not have
constructed the apartment building and manufacturing facility In the
City; and
I'ho tax Increment financing plan will afford maximum opportunity,
consistent with the sound needs of the City as o whole, for the
development by private enterprise as it will enable the City to
provide the necessary public improvements for dovelopment; thereby
encour,:ging redevelopment in the area.
3. The tax increment financing plan conforms to the general plan for
the development of the city as a whole as it will result in J
construction of an apartment building and a manufacturing facility
which will provide needed housing, create new jobs and increase the
tax base of the City.
4. The tax increment district to be established is a redevelopment
district pursuant to Minnesota Statutes, Section 273.73, Subdivision
10(aX3) in which the conditions described in Section E of this plan
ex ist.
The Housing and Redevelopment Authority of Monticello, Minnesota does
hereby approve the tax increment financing plan and the creation of a tax
increment financing district as described in said tax increment financing plan and
does hereby transmit to the City Council the plan for their adoption.
Adopted by the Housing and Redevelopment Authority this _ day of
March, 1985.
ATTEST:
Chairman i
CONSTRUCTION 5 ADDITION
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Estimate of Costs
The estimate of public costs associated with the tax increment financing
redevelopment district are outlined in the following line item budget.
BUDGET
Street Construction
$127,500
Sanitary Sewer and Watermain
118,500
Storm Sewer
57,300
Attorney Fees
7,800
Issuance Costs
15,190
Allowance for Discount
7,410
*Capitalized Interest
58,500
390,000
•The amount of capitalized interest will be equal to an amount sufficient to
pay Interest on the bonds from the date of issue until the date of collection
of sufficient tax increment revenue to meet scheduled interest payments
when due, but not exceeding 3 years as required by Minnesota Statutes,
Chapter 475. Predicting capitalized interest prior to Issuance is extremely
difficult as it is a function of interest rates, construction schedules and tax
timing; therefore, the above figure is only an estimate of capitalized
interest and is subject to change.
Estimated Amount of Loan/Bonded Indebtedness
An estimate of the amount of bonded indebtedness Is expected to be
$390,000. The term of the issue is 20 years and the interest rate is expected
to be 9 percent. The amount of two and one-half to three years capitalized
interest is estimated to be $58,500. Debt service on the bond will be met
through a combination of tax increment revenues, tax levies and assessment
income.
Sources of Revenue
There are several sources of revenue to be used to finance public costs
associated with the development projects within the redevelopment project.
The majority of the public costs are to be paid with tax Increment revenues
In combination with special assessments and a tax levy. The tax Increment
is generated as a result of the taxation of the land and Improvements In the
tax Increment redevelopment district. Tax Increment financing refers to a
funding technique that utilizes Increases In assessed valuation and the
property taxes attributed to new development to finance, or assist In the
financing of public development costs. The facilities aro expected to be
fully assessed beginning in 1986 at which time the development will
generate an annual tax increment of $25,000 collectable In 1987. The tax
increment estimate for 1987 Is based,tti�on the assumption that boff IFe
apartment building and manufacturi focility are fully completed in 1885
and fully assessed on January 2, 12. A partial assessment in 1986 will
produce a partial tax increment osvment in 1987.
Original Assessed Value
Pursuant to Minnesota Statutes, Section 273.74, Subdivision I and Section
273.76, Subdivision 1, the Original Assessed Value (OAV) for the City of
Monticello tax increment financing redevelopment district is based on the
value placed on the property by the County Assessor in 1984. This assessed
value is $13,960 based on the replat to be filed with the County. Each year
the Office of the County Auditor will measure the amount of increase or
decrease in the total assessed value of the tax increment redevelopment
district to calculate the tax increment payable to the Monticello
redevelopment district fund. in any year in which there is an Increase in
total assessed valuation in the tax Increment redevelopment district above
the adjusted original assessed value, a tax increment will be payable. In any
year in which the total assessed valuation in the tax Increment financing
redevelopment district declines below the original assessed valuation, no
assessed valuation will be captured'and no tax increment will be payable.
The County Auditor shall certify in each year after the date the Original
Assessed Value was certified, the amount the OAV has increased or
decreased as a result of:
change in tax exempt status of property;
reduction or enlargement of the geographic boundaries of the
district;
3. change due to stipulations, adjustments, negotiated or court-ordered
abatements.
Estimated Captured Assessed Value
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 1 and Minnesota
Statutes, Section 273.76, Subdivision 2, the estimated Capturedssessed
el a CAV) of the tax increment financing redevelopment district will
annually approximate $306,670. It Is expected that the estimated $306,670
will be captured as a result of the improvements to be constructed by
Construction Five. This amount will be captured for up to twenty-five years
or until the project debt is retired. The Authority requests 100 percent of
the available increase In assessed value for repayment of debt and current
expenditures.
L. Duration of the District
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 1, the duration
of the tax Incremont XsUrTct within the Redevelopment Project must be
indicated within the finance plan. 'The duration of the tax Increment
district will be 25 years from the date of receipt of the first tax increment.
Thus, It Is estimated that the tax increment district, Including any
modifications to the finance plan for subsequent phases or other changes,
would terminate twenty-five years from the collection of the first tax
Increment.
N1. Estimated Impact on Other Taxing Jurisdictions
The impact of the loss of lax dollars represented as tax increments is
estimated below for each taxing jursidiction. This estimate is based on the
existing redevelopment proposals and does not include the possible tax
increments derived from any other future development, mill changes, or
inflation factors.
Total Assessed Value
Tax Increment Finance District 1/2/84 Total $ 13,960
latest Assessed Value of Each Government Body:
% of District
to Total
Wright County $ 358,798,000 .00004
School District #882 101,128,478 .0001
City of Monticello 79,954,554 .0002
Othcr 115,919,820 .0001
Considering all the districts, it can be seen from the above that the school,
city and county districts will have over 99% of each respective district
available for normal growth of tax base or valuation. Applying the
percentage of the total mill rate in 1985 levied by each taxing jurisdiction
to the projected mill rate and the estimated tax increment received reveals
the annual loss of tax dollnrs by each taxing jurisdiction as listed in the
table below assuming development would occur without public assistance.
The finance plan indicates we anticipate a tax increment at build out as
follows:
Captured Assessed Estimated Tax
valuation Increment Recelvod
Tex Increment Finance District $306,670 f 25,000
Based on the current mill rete, the estimated taxes received would be as
follows for the taxing bodies:
Mille Percent Tax Increment
City 18.874 23.2 $ 5,603
County 19.719 24.2 8,063
School District #882 39.714 48.9 12,212
Other 2.998 3.7 922
Total $1.305 100.0% $25,000
The following table represents the additional mills that would have to be
levied to compensate for the loss of tax dollars In estimated tax Increments
for each taxing jurisdiction. The tax Increments derived from the
5
manufacturing facility and housing alluded to in the tax increment district
would not be available to any of the taxing jurisdictions were it not for
public intervention by the Authority. Although the increases in assessed
value due to development will not be available for the application of the
mill levy for the duration of the tax increment financing district, this new
assessed value could eventually permit a mill levy decrease. If it could be
assumed that the captured assessed value was available for each taxing
jurisdiction, the non -receipt of tax dollars represented as tax increments
may be determined. This determination is facilitated by estimating how
much the mill levy for property outside of the tax increment financing
district would have to be increased to raise the same amount of tax dollars
in each taxing jurisdiction that would be available if the projects occurred
without the assistance of the Authority.
Adjusted• Required Tax
Assessed Value Mills increment
School District 101,114,516 .121 $ 12,212
County 358,784,040 .017 6,063
City 79,940,594 .073 5,803
*Tax Increment District assessed valuation subtracted.
Modifications of the Tax increment Financing District
In accordance with Minnesota Statutes, Section 273.74, Subdivision 4, any
reduction or enlargement of t i�graphic area of the project or tax
increment financing district, Increase in amount of bonded indebtedness to
be incurred, including a determination to capitalize interest on debt If that
determination was not a part of the original plan, or to Increase or decrease
the amount of interest on the debt to be capitalized, Increase In the portion
of the captured assessed value to be retained by the Authority, Increase in
total estimated tax increment expenditures or designation of additional
property to be acquired by the authority shall be approved upon the notice
and after the discussion, public hearing and findings required for approval of
the original plan. The geographic area of a tax increment financing district
may be reduced, but shall not be enlarged after five years following the date
of certification of the original assessed value by the county auditor. The
tax bneroment financing redevelopment district may therefore be expanded
until 1990.
Limitation on Administrative Expenses
In accordance with Minnesota Statutes, Section 273.73, Subdivision 13 and
Minnesota Statutes,Sectio_n_17T_7K_SubdivWon 3, administrative expenses
means aff azpeitures of an authority other than amounts paid for the
purchase of land or amounts paid to contractors or others providing
materiels and services, Including architectural and engineering services,
directly connected with the physical development of the real property In the
district, relocation benefits paid to or services provided for persons residing
or businesses located In the district or amounts used to pay Interest on, fund
a reserve for, or sell at a discount bonds Issued pursuant to Section 273.77.
Administrative expenses Includes amounts paid for services provided by bond
counsel, fiscal consultants, and planning or economic development
consultants. No tax increment shall be used to pay any administrative
expenses for a project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment financing plan or the total tax
increment expenditures for the project, whichever is less.
Limitation on Duration of Tax Increment Financing Districts
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 1, "no tax
increment shall be paid to an authority three years from the date of
certification by the County Auditor unless within the three-year period (1)
bonds have been issued pursuant to Section 273.77 or in aid of a project
pursuant to any other law, except revenue bonds Issued pursuant to Chapter
474, prior to the effective date of the Act; or (2) the authority has acquired
property within the district; or (3) the authority has constructed or caused
to be constructed public improvements within the district ... " The City or
Authority must therefore issue bonds, or acquire property, or construct or
cause public improvements to be constructed by 1988 or the Office of the
County Auditor may dissolve the tax increment financing district.
Limitation on Qualification of Property in Tax Increment District Not
Subject to Improvement
Pursuant to Minnesota Statutes Section 273.75, Subdivision 6, "if, after four
years from the date of certification of the original assessed value of the tax
increment financing district ..., no demolition, rehabilitation or renovation
of a parcel or other site preparation Including Improvement of a street
adjacent to a property but not installation of utility service Including sewer
or water systems, has been commenced on a parcel located within a tax
increment financing district by the authority or by the owner of the parcel
in accordance with the tax inclement financing plan, no additional tax
increment may be taken from that parcel and the original assessed value of
that parcel shall be excluded from the original assessed value of the tax
increment financing district. If the authority or the owner of the parcel
subsequently commences demolition, rehabilitation or renovation or other
site preparation on that parcel including improvement of a street adjacent
to that parcel, in accordance with the tax increment financing plan, the
authority shall certify to the county auditor in the annual disclosure report
that the activity has commenced. The county auditor shall certify the
assessed value thereof as most recently certified by the commissioner of
revenue and add It to the original assessed value of the tax Increment
financing district.
Limitation on the Use of Tax Increment
All revenues derived from tax Increment shall be used In accordance with
the tax Increment financing plan. The revenues shell be used to finance or
otherwise pay public redevelopment costs pursuant to Minnesota Statutes,
Chapter 472A. These revenues shall not be used to circumvent existing lewy
limit law. No revenues derived from tax Increment shall be used for the
construction or renovation of a municipally owned building used primarily
and regularly for conducting the business of the munleipalityi this provision
shall not prohibit the use of revenues derived from tax Increments for the
construction or renovation of a parking structure, a commons area used as a
public park or a facility used for social, recreational or conference purposes
and not primarily for conducting the business of the municipality.
S. Notification of Prior Planned Improvements
Pursuant to Minnesota Statutes Section 273.76, Subdivision 4, the Authority
has reviewed and searched the properties to be included in the tax
increment financing redevelopment district and found no properties for
which building permits have been issued during the 18 months immediately
preceding approval of the tax increment financing plan by the city. If the
building permit had been issued within the 18 month period preceding
approval of the tax increment financing plan by the city, the county auditor
shall increase the original assessed value of the district by the assessed
valuation of the improvements for which the building permit was issued,
excluding the assessed valuation of improvements for which a building
permit was issued during the three month period immediately preceding said
approval of the tax increment financing plan, as certified by the assessor.
T. Excess Tax Increments
Pursuant to Minnesota Statutes, Section 273.75, Subdivision 2, in any year in
which the tax increment exceeds the amount necessary to pay the costs
authorized by the tax increment plan, including the amount necessary to
cancel any tax levy as provided in Minnesota Statutes, Section 475.61,
Subdivision 3, the Authority shaU use the excess amount to:
1. prepay the outstanding bonds;
2. discharge the pledge of tax increment therefore;
3. pay Into an escrow account dedicated to the payment of such bond;
4. repay any loans including Interest on these loans; or
5, return the excess to the County Auditor for redistribution to the
respective taxing jurisdictions in proportion to their mill rate.
U. Requirement for Agreements with the Developer
Pursuant to Minnesota Statutes Section 273.75, Subdivision 5, no more that
25 percent by acreage othe property to be acquired by the Authority
within a project which contains a in the redevelopment district shoU be
owned by the Authority as a result of acquisition with the proceeds of bonds
Issued pursuant to Section 273.77 without the Authority having prior to
acquisition In excess of 25 percent of the acreage, concluded an agreement
for the development of the property acquired and which provides recourse
for the Authority should the development not be completed. See Section E
for the development agreement requirement due to soil deficiencies.
V. Assessment Agreements
Pursuant to Minnesota Statutes Section 273.78, Subdivision B, the Authority
may, upon entering into a development agreement pursuant to Minnesota
Statutes Section 273.75, Subdivision 5, enter into an agreement In
recordable form with the developer of property within the tax increment
financing district which establishes a minimum market value of the land and
completed improvements for the duration of the tax increment
redevelopment district. The assessment agreement shall be presented to the
county assessor who shall review the plans and specifications for the
improvements to be constructed, review the market value previously
assigned to the land upon which the improvements are to be constructed and
so long as the minimum market value contained in the assessment
agreement appears in the judgment of the assessor, to be a reasonable
estimate, the assessor may certify the minimum market value agreement.
W. Administration of the Tax Increment Financing Redevelopment District and
Maintenance of the Tax Increment Account
Administration of the tax increment financing redevelopment district will
be handled by the Executive Director of the Authority and the Office of the
City Administrator.
The tax Increment received as a result of increases in the assessed value of
the tax increment financing redevelopment district will be maintained in a
special account separate from all other municipal accounts and expended
only upon sanctioned municipal activities identified in the finance plan.
X. Annual Disclosure Requirements
pursuant to Minnesota Statutes, Section 273.74, Subdivision 5, an authority
must file an annus s�c9osure report for all tax Increment financing
districts. The report shall be filed with the school board, county board and
the Minnesota Department of Energy and Economic Development. The
report shall include the following information:
1. The amount and source of revenue In the account;
2. The amount and purpose of expenditures from the account;
3. The amount of any pledge of revenues, including principal and
interest on any outstanding bonded indebtedness;
4. The original assessed value of the district;
5. The captured assessed value retained by the authority;
6. The captured assessed value shared with other taxing districts;
7. 'rho tax increment received.
The annual disclosure report is designed to be a two-way medium of
information dissemination for both the Office of the County Auditor and the
Authority. Should the auditor want additional information from the
Authority regarding its tax increment financing activities, such Information
should be requested prior to submission of the annual disclosure report by
the Authority. Similarly, the city council may utilize the annual disclosure
report as a means for requesting information from the Office of the County
Auditor.
Additionally, the Authority must annually publish a statement in a
newspaper of general circulation in the municipality showing the tax
increment received and expended in that year, the original assessed value,
the captured assessed value, amount of outstanding bonded indebtedness and
any additional information the city deems necessary.
Assumptions
It was necessary to make certain assumptions regarding income, costs and
timing of the tax increment redevelopment district. These assumption are
based on discussions with Authority, County, and fiscal consultant staff.
Z. Municipal Findings
Pursuant to Minnesota Statutes, Section 273.74, Subdivision 3, before or at
the time of approval of the tax increment financing plan, the municipality
shall make the following findings and shall set forth in writing the reasons
and supporting facts for each determination:
The proposed development or redevelopment, in the opinion of the
city, would not reasonably be expected to occur solely through
private investment within the reasonably foreseeable future and,
therefore, the use of tax increment financing is deemed necessary
since Construction Five could not economically construct the present
facility without the provision of the necessary public improvements
to the site and without the use of tax increments to assist with the
financing of these public improvements, the developer would not have
constructed the apartment building and manufacturing facility in the
City= and
2. The tax increment financing plan will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the
development by private enterprise as it will enable the City to
provide the necessary public Improvements for developmenti thereby
encouraging redevelopment In the area.
3. 'fhe tax Increment financing plan conforms to the general pian for
the development of the city as a whole as it will result in
construction of an apartment building and a manufacturing facility
which will provide needed lousing, create new jobs and Increase the
tax base of the City.
4. The tax Increment district to be established is a redevelopment
district pursuant to Minnesota Statutes, Section 273.73, Subdivision
10(x)(3) in which thecon %ns escr od In Section E of this plan
exist.
10
A RESOLUTION BY THE MONTICELLO HOUSING
AND REDEVELOPMENT AUTHORITY APPROVING A
TAX INCREMENT FINANCING REDEVELOPMENT
DISTRICT PURSUANT TO MINNESOTA STATUTES,
SECTIONS 273.71 TO 273.78 INCLUSIVE AND A
FINANCE PLAN FOR SAID TAX INCREMENT
FINANCING DISTRICT.
WHEREAS, The Housing and Redevelopment Authority in and for the City of
Monticello (the "Authority') is carrying out the Monticello Redevelopment Project
Modification 01 (the "Project') and Redevelopment Plan Modification p1 (the
"Plan"); and
WHEREAS, the Authority has determined that it is necessary to create a tax
increment financing district pursuant to Minnesota Statutes, Sections 273.71 to
273.78 inclusive, within the existing project, created and modified pursuant to
Minnesota Statutes, Section 462.411 et seq„ the Minnesota Housing and
Redevelopment Act; and
WHEREAS, the Authority recommends that the project be undertaken as
rapidly as possible and be financed with local funds including tax increment
financing as authorized by Minnesota Statutes, Sections 273.71 through 273.78; and
WHEREAS, there was presented to this meeting of the governing body of the
Authority for Its consideration and approval, a copy of a tax increment plan for the
project area described in said plan dated March, 1985 which plan is entitled The
Construction Five Development Proposal; and
WHEREAS, the Authority has submitted the tax increment financing plan to
the City Planning Commission of the City of Monticello (the "Planning
Commission') for Its review and opinion; and
NOW, THEREFORE, BE IT RESOLVED by the governing body of the Housing
and Redevelopment Authority in and for the City of Monticello:
The proposed development or redevelopment, In the opinion of the
city, would not reasonably be expected to occur solely through
private investment within the reasonably foreseeable future and,
therefore, the use of tax increment financing is deemed necessary
since Construction Five could not economically construct the present
facility without the provision of the necessary public Improvements
to the site and without the use of tax increments to assist with the
financing of these public Improvements, the developer would not have
constructed the apartment building and manufacturing facility in the
City; and
'rho tax Increment financing plan wiH afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the
development by private enterprise as it will enable the City to
provide the necessary puhHe Improvements for development; thereby
encouraging redevelopment in the area.
3. The tax increment financing plan conforms to the general plan for J
the development of the city as a whole as it will result in
construction of an apartment building and a manufacturing facility
which will provide needed housing, create new jobs and Increase the
tax base of the City.
4. The tax increment district to be established is a redevelopment
district pursuant to Minnesota Statutes, Section 273.73, Subdivision
10(&x3) in which the conditions described in Section E of this plan
exist.
The Housing and Redevelopment Authority of Monticello, Minnesota does
hereby approve the tax increment financing plan and the creation of a tax
increment financing district as described in said tax increment financing plan and
does hereby transmit to the City Council the plan for their adoption.
Adopted by the Housing and Redevelopment Authority this _ day of
March, 1985.
ATTEST:
Chairman '�