Loading...
City Council Resolution 1998-38 CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA Council member Bruce Thielen introduced the following resolution and moved its adoption: RESOLUTION NO. 98-38 RESOLUTION ADOPTING THE MODIFIED REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING WITHIN CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 TAX INCREMENT FINANCING DISTRICT NO. 1-25 AND ADOPTING THE RELATED TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Monticello, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed that the City Council adopt the Modified Redevelopment Plan for the Central Monticello Redevelopment Project No. 1 and establish within Central Monticello Redevelopment Project No. 1 Tax Increment Financing District No. 1-25 ("District No. 1-25") and adopt the related Tax Increment Financing Plan therefor (collectively, the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047 and 469.174 through 469.179, all inclusive, as amended, all as reflected in the Plans, and presented for the Council's consideration. 1.02. The Council has investigated the facts relating to the Plans. 1.03. The City has performed all actions required by law to be performed prior to the adoption and approval of the proposed Plans, including, but not limited to, notification of Wright County and School District No. 882 having taxing jurisdiction over the property to be included in District No. 1-25, a review of and written comment on the Plans by the City Planning Commission, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relatingto the Plans and to the activities contemplated therein have heretofore been prepared by staff and submitted to the Council and/or made a part of the City files and proceedingson the Plans. The Reports include data, information and/or substantiation constituting or relating to the bases forthe 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 ofthis resolution to the same extent as if set forth in full herein. Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The Council hereby finds that the Plans, are intended and, in the judgment of this Council, N:\M innsota\MONTICEL\Tif I -25\city_res.wpd solution 98-38 Qe 2 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. 1-25. 3.01. The Council hereby finds that Tax Increment Financing District No. 1-25 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 on the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of District No. 1-25 permitted by the Tax Increment Financing Plan, that the Plans conform to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunityconsistenttyith the sound needs of the City as a whole, for the development of District No. 1-25 by private enterprise. 3.03. The City elects to make a qualifying local contribution in accordance with Minnesota Statutes, Section 273.1399, subd. 6(d), in order to qualify District No. 1-25 for exemption from state aid losses set forth in Section 273.1399. 3.04. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. Section 4. Approval and Adoption of the Plans. 4.01. The Plans, as presentedto 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. 4.02. 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. 4.03 The Auditor of Wright County is requested to certify the original net tax capacity of District No. 1-25, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increasedor decreased; and the City of Monticello is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within District No. 1-25, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. The motion for the adoption of the foregoing resolution was duly seconded by Council member Brian stumpf ,and upon a vote being taken thereon, the following voted in favor thereof: Bill Fair, Clint Herbst, Brian Stumpf, Roger Carlson, Bruce Thielen N: \M i nnsota\M ONTIC E L\Ti f l-25\city_res. wpd resolution 98-38 Page 3 and the following voted against the same: Dated: September 14, 1998 Mayor (Seal) None ATTEST: ~. City Administrator N:\M innsota\M ONTIC EL\Tif 1-25\city_res.wpd EXHIBIT A RESOLUTION # 98-38 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Tax Increment Financing District No. 1-25, ("District No. 1-25") as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: Finding that the District No. 1-25 is an economic development district as defrned in M.S., Section 469.174, Subd. 12. Tax Increment Financing District No. 1-25 is a contiguous geographic area within the City's Central Monticello Redevelopment Project No. 1, delineated in the Plan, for the purpose of financing economic development in the City through the use of tax increment. District No. 1-25 consists of a portion of Central Monticello Redevelopment ProjectNo. l not meeting requirementsfor other types oftax increment financing districts, which is in the public interest because it will facilitate construction of a 12,000 square foot manufacturing facility which will discourage commerce, industry, or manufacturingfrom movingtheir operations to another state or municipality; it will increase employment in the state, and preserve and enhance the tax base of the state. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment frnancing would be less than the increase in the market value estimated to result from the proposed development after subtracting thepresent value of theprojected tax increments for the maximum duration of District No. 1-25 permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the development proposed in this plan is a manufacturing facility that meets the City's objectives for economic development. The cost of site improvements and public utilities makes development of the facility infeasible without City assistance. The developer was asked for and provided a letter and a proforma as justification that he would not have gone forward without tax increment assistance (see attachment in Appendix E). As the proforma shows, the net annual rate of return for this project without tax increment assistance is not commercially feasible The increased market value of the site that could reasonable be expected to occur without the use of tax incrementfinancingwould beless than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the Plan: Due to ownership, parcel size and zoning factors, no other development with greatermarketvalue is reasonably expected at this site. The site is part of a parcel owned by Blue Chip Development Company, which operates a manufacturing business there. Blue Chip is splitting the parcel in order to lease the site to B&B Stamping, Inc. The site is zoned I-2 and the parcel is narrow, which limits the development options. The proposed development maximizes the develop able space on the site by use of a shared driveway with the adjacent Blue Chip business. If the proposed development did not go forward, the site would likely remain part of the existing Blue Chip manufacturing site and would not be developed for any other use. The only possible alternative use of the site would be a similar or smaller manufacturing developmentwhich the City reasonably expects would have a similar financial pro forma indicating the need for tax increment assistance. Therefore, the City concludes that no N: \M innsota\MONTICEL\Tif I-25\city_res. wpd A to ion 98-38 crease in market value is reasonably expected on this site without tax increment assistance. As shown in Appendix C, the total increased market value from the proposed development is $270,600. The present value of tax increments from TIF District No. 1-25 is estimated to be $56,031. As discussed above, the Council finds that no development of any kind is likely on the site without assistance, and in no event would any alternative development have a value exceeding $214,569. Finding that the Tax Increment Financing Plan for DistrictNo. 1-25 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning Commission on September 1, 1998. The Planning Commission found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for District No. 1-25 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 District No. 1-25 will result in increased employmentin the City and the State of Minnesota, increased tax base of the State, and add a high quality development to the City. N:\M innsota\M ONTIC EL\Tif 1-25\ci[y_res.wpd