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EDA Resolution 2016-010CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-010 RESOLUTION APPROVING MODIFICATION NO. 1 OF TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1 -35 WHEREAS, the City of Monticello (the "City ") and the Housing and Redevelopment Authority in and for the City of Monticello (the "HRA ") previously established Central Monticello Redevelopment Project Area No. I (the "Redevelopment Project ") pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended (the "HRA Act "); and WHEREAS, on September 12, 2005 the City and the HRA approved a Tax Increment Financing Plan (the "TIF Plan") for Tax Increment Financing District No. 1 -35 (the "TIF District ") located within the Redevelopment Project, pursuant to the HRA Act and Minnesota Statutes, Sections 469.174 to 469.1794, as amended (collectively, the "TIF Act "); and WHEREAS, administration of the TIF District was subsequently transferred to the City of Monticello Economic Development Authority (the "Authority "); and WHEREAS, the City and Authority have determined a need to modify the TIF Plan in order to amend the description of the proposed redevelopment contained therein and such amendment is consistent with the redevelopment program for the Redevelopment Project; and WHEREAS, pursuant to Section 469.175, subd. 4(b) of the TIF Act, a tax increment financing plan may be modified without public hearing or the findings required to be made for the original tax increment financing plan if the modification does not include (i) any reduction or enlargement of the geographic area of the project or tax increment financing district; (ii) an increase in the amount of bonded indebtedness; (iii) a determination to capitalize interest on debt if that determination was not a part of the original plan; (iv) an increase in the portion of the captured net tax capacity to be retained by the City; (v) an increase in the estimated cost of the project, including administrative expenses, to be paid or financed with tax increment from the district; or (vi) the designation of additional property to be acquired by the authority; and WHEREAS, the proposed modifications to the TIF Plan consist solely of a change in description of the proposed redevelopment within the TIF District, and therefore no public hearing is required; and WHEREAS, the City is scheduled to consider the proposed modifications to the TIF Plan on September 26, 2016. 486012v1 MNI MN 190-115 NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the City of Monticello Economic Development Authority as follows: 1. The administrative modification to the TIF Plan described herein is hereby approved in substantially the form on file in City Hall, subject to approval of the modification by the City Council on September 26, 2016, and shall be designated Modification No. 1 to Tax Increment Financing Plan for Tax Increment Financing District No. 1 -35 ( "Modification No. I "). 2. Authority staff is authorized to forward a copy of Modification No. 1 to the Department of Revenue and the State Auditor pursuant to Minnesota Statutes 469.175, subd.4a. 3. Authority staff is likewise authorized and directed to forward a copy of Modification No. 1 to Wright County for information purposes. DATED: September 14, 2016 President ATTEST: EyUive Director 4860120 MNI MN 190-115 2 MODIFICATION NO.1 TO TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-35 Original Plan Approved by City Council of the City on September 12, 2005 This Modification Approved by Board of Commissioners of the Authority on September 14, 2016 This Modification Approved by City Council of the City on September 26, 2016 I. Background The Housing and Redevelopment Authority in and for the City of Monticello (the "HRA ") and the City of Monticello (the "City ") previously created Redevelopment Project No. 1 (the "Redevelopment Project ") pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended (the "HRA Act "), and adopted a redevelopment plan for the Redevelopment Project. On September 12, 2005, the City Council of the City approved the creation of Tax Increment Financing District No. 1 -35 (the "TIF District ") within the Redevelopment Project and adopted a tax increment financing plan for the TIF District (the "TIF Plan") under the HRA Act and Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act "). The TIF District is a redevelopment district, and the TIF Plan provides for certain redevelopment activities in the TIF District. The City subsequently transferred control and responsibility for the Redevelopment Project, and any tax increment financing districts created within the Redevelopment Project, to the City of Monticello Economic Development Authority (the "Authority "). The TIF District was originally created to promote redevelopment of a portion of the downtown central business district and, specifically, to foster the construction of an 11,000 square -foot retail facility in the downtown area. The property slated for redevelopment was duly acquired and site preparations were completed by a private developer pursuant to a Contract for Private Development, but due to a downturn in the economy shortly after establishment of the TIF District, the retail facility was not constructed. The City and Authority have now determined a need to modify the TIF Plan in order to provide for the construction of multifamily rental housing within the TIF District and Redevelopment Project, rather than the retail use originally contemplated. The redevelopment activities described in this modification are consistent with the City's comprehensive plan. The TIF Plan remains in full force and effect and is not modified except as described in this modification document. Any capitalized terms used herein but otherwise not defined shall have the meanings assigned to such terms in the Redevelopment Plan, as amended, and the TIF Plan. (The remainder of this page is intentionally left blank.) Error! Unknown document property name. H. TIF Plan Modifications to TIF District No. 1-35 The following sections of the TIF Plan for the TIF District are modified as set forth below. A. The first paragraph of Section 2 -3 of the TIF Plan (Statement of Objectives) is modified as follows: The District currently consists of one parcel of land and adjacent and internal rights -of -way. The District is being created to facilitate construction of a three- story, approximately 23 -unit multifamily residential facility and associated on -site parking within the City. Please see Appendix A for further project information. A Contract for Private Development (the "Contract ") was executed with Masters Fifth Avenue, Inc. in 2005 and has since been amended three times. Construction is expected to commence by the end of 2017 and to be completed by the end of 2018. B. Section 2 -7 of the TIF Plan (Duration of the District) is modified as follows: Pursuant to Section 469.175, subd. 1 and Section 469.176, subd. 1 of the TIF Act, the duration of the District must be indicated within the TIF Plan. Pursuant to Section 469.176, subd. lb, the duration of the District will be 25 years after receipt of the first increment by the Authority (a total of 26 years of tax increment). The date of receipt by the Authority of the first tax increment is expected to be 2018. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2043, or when the terms of the Contract are satisfied, whichever is earlier. The Authority reserves the right to decertify the District prior to the legally required date. C. Appendix A (Project Description) is deleted in its entirety and replaced with the following: TIF District No. 1 -35 is a redevelopment district. Pursuant to the Contract for Private Development between Masters Fifth Avenue, Inc. and the Authority, as amended, the Developer proposes to construct a three - story, approximately 23 -unit multifamily rental housing facility and associated parking within the TIF District. The units will be marketed for occupancy by residents aged 55 and up. Construction is expected to commence by the end of 2017 and to be completed by the end of 2018. The costs of land acquisition in a maximum principal amount of $170,000, which were incurred by the Developer within five years after certification of the TIF District, will be reimbursed to the Developer through a pay -as- you -go note at an interest rate of 6.5 %.