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City Council Resolution 2005-95CITY OF MONTICELLO COUNTY OF WRIGHT STATE OF MINNESOTA Collncll member Stumpf introduced the following resolution and moved its adoption: RESOLUTION NO. 2005-95 RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-36 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Monticello, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Monticello Housing and Redevelopment Authority (the "HRA") has heretofore established Central Monticello Redevelopment Project No. 1 and adopted the Redevelopment Plan therefor. It has been proposed by the HRA and the City that the City adopt a Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. 1 (the "Redevelopment Plan Modification") and establish Tax Increment Financing District No. 1-36 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The HRA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The HRA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Wright County and Independent School District No. 882 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, approval of the Plans by the HRA on August 16, 2005, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05 The City is not modifying the boundaries of Central Monticello Redevelopment Project No. 1 but is, however, modifying the Redevelopment Plan therefor. Section 2. FindinQs for the Adoption and Approval of the Plans. 2.01. The Council hereby finds that the Plans, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public purpose and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of Tax Increment Financing District No. 1-36. 3.01. The Council hereby finds that the District is in the public interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. 12. 3.02. The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan, that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound needs of the City as a whole, for the redevelopment or development of the District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. Section 4. Public Purpose 4.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will help discourage commerce, industry, or manufacturing from moving their operations to another state or municipality, and will result in preservation and enhancement of the tax base of the State and thereby serves a public purpose. Section 5. Approval and Adoption of the Plans. 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Executive Director of the HRA. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Wright County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the HRA is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City Administrator is further authorized and directed to file a copy of the Plans with the Commissioner of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. The motion for the adoption of the foregoing resolution was duly seconded by Council member Posusta , and upon a vote being taken thereon, the following voted in favor thereof: Clint Herbst, Wayne Mayer, Tom Perrault, Glen Posusta and Brian Stumpf and the following voted against the same: None Dated: August 22, 2005 Clint Herbst, Mayor (Seal) ATTEST: Rick Wolfsteller, City Administrator EXHIBIT A RESOLUTION NO. 2005-95 The reasons and facts supporting the (findings for the adoption of the Tax Increment Financing Plan (TIF Plan) For Tax Increment Financing District No. 1-36 (TIF District No. 1-36) as required pursuant to 1US., Section 469.175, S'ubci' 3 are as follows: Finclin,g theft the TIF Dis•iriet No. 1-36 is cin econoinic tlevelopment district cis defined in NI.S., Section 469.17-1, Subd 12. TIF District No. 1-36 is a contiguous geographic area within the City's Central Monticello Redevelopment Project No. 1, delineated in the TIF Plan, for the purpose of financing economic development in the City through the use of tax increment. TIF District No. I-36 is in the public interest because it will facilitate construction of a 54,000 s. f. office/warehouse facility for Dahlheimer Distributing which will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality, and preserve and enhance the tax base of the state. 2. Flnclln�a shut the proposecl development, to the opinion of the City Council, ivouhl not rectsoncibly be expected to occur solely throu�h private lnvestillent til•'ithin the reasonably foreseeable fiittire cincl that the increased nnarket value of the site thcit could recisoncibly be expected to occur withottt the use of tax increlnenl fi1?cil'lcin()' vvolllcl be less than the increcise to the nuirket value estitnutecl to result fr0177 the proposed development ciftei strbtructirlg the preSL'11l vcllZlC' of the projeclecl tax tncretnents for the lnaxiinliin clitrution of TIF District No. 1-36 permitted by the TIF Plan. The proposed developtnent, in the opinion oj* the City, tivocilcl not reasoncibly be expected to occur solely through private inveslinent ivllhln the i"easonclbly jo1•eseecihle fiitilre: This finding is supported by the fact that the development proposed in the TIF Plan is an office/warehouse facility that meets the City's objectives for economic development. The business is moving from another site in town clue to a freeway CI interchange project and could potentially move to another- site. The cost of land acquisition, site and public improvements and utilities make development of the facility infeasible without City assistance. The City has suffered from a lack of affordable developable commercial property. The HRA is the land developer for the new business park and is only charging enough to cover its costs plus interest to build the infrastructure. The inereusecl meirkel vulue of the site that coulcl reusonubly be expected to occur vvithout the use of lux increment jincincing tivoulcl be less than the inerectse in musket value estimulecl to resull fi•oil'i the proposed clevelopmenl aper sllblructinu the present Vcillte of the projeclecl lax increineills jar the inuxilintin clurcition (#71F District No. 1-36 permittecl by the TIF P1un: The City supported this finding on the grounds that the cost of land acquisition, site and public improvements and utilities add to the total development cost. This site and surrounding sites have been marketed for several years without Success. Therefore, the City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided to the development. To SUr11(11arize this flndlll": a. The City's estimate ofthe amount by which the market value of the site will increase without the use of tax increment financing is $0 (for the reasons described above), except some unknown amount of appreciation. b. Ifthe proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately $3,100,531. The increase in market value would be due primar►.. to new construction within the District. (See Appendix D and F of TIF Plan). c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be no more than $517,677 (See Appendix F of TIF Plan) d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $2,582,854 (the amount in clause b less the amount in clause c) without tax increment assistance. If the City and HRA did not assume the role of land developer, the property would not develop in the near term. If it did develop without assistance, the likely uses would be dominated by housing or other development with little or no employment. The business park and the District meet the City's objectives for retaining existing quality businesses, a mixture of land uses, and high quality employment for its citizens. 3. Finding that the TIF Plan for TIF District No. 1-36 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TiF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for TIF District No. 1-36 will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of Central Monticello Redevelopment Project. No. 1 by private enterprise. The project to be assisted by the District will retain employment in the City and the State of Minnesota, increase the tax base of the State, and add a high quality development to the City.