RES 2007-14 - 00014290RESOLUTION NO. 2007 -14
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS
FOR TAX INCREMENT FINANCING DISTRICTS NOS. NOS. 1-3,6-7,9,11-14 AND 16 -18
TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONDING
AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1, CREATING TAX
INCREMENT FINANCING DISTRICT NO. 19 AND ADOPTING A TAX INCREMENT
FINANCING PLAN RELATING THERETO
BE IT RESOLVED by the City Council (the "Council ") of the City of Fridley, Minnesota (the
"City "), as follows:
Section 1. Recitals.
1.01. It has been proposed by the Housing and Redevelopment Authority (the "Authority ") that the
Council approve and adopt the proposed modifications to its Redevelopment Plan for Redevelopment
Project No. 1 (the "Project Area ") reflecting increased project costs and increased bonding authority,
pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 469.047, inclusive, as
amended and supplemented from time to time.
1.02. It has been further proposed by the Authority that the Council approve and adopt the proposed
modifications to the Tax Increment Financing Plans (the "Existing Plans ") for Tax Increment Financing
Districts Nos. 1 -3, 6 -7, 9, 11 -14 and 16 -18 (the "Existing Districts ") reflecting increased project costs and
increased bonding authority within the Project Area, pursuant to Minnesota Statutes, Section 469.174
through 469.1799, inclusive, as amended and supplemented from time to time.
1.03. It has been further proposed by the Authority that the Council approve the creation ofproposed
Tax Increment Financing District No. 19 (the "Proposed District ") and adopt a proposed Tax Increment
Financing Plan (the "Proposed Plan") relating thereto, pursuant to and in accordance with Minnesota
Statutes. Section 469.174 to 469.1799, inclusive, as amended and supplemented from time to time.
1.04. The Authority has caused to be prepared, and this Council has investigated the facts with
respect thereto, a modified Redevelopment Plan for the Project Area and modified Existing Plans for
the Existing Districts reflecting increased project costs and increased bonding authority within the
Project Area and a Proposed Plan for the Proposed District, defining more precisely the property to
be included, the public costs to be incurred, and other matters relating thereto.
1.05. The Council has performed all actions required bylaw to be performed prior to the approval
and adoption of the modifications to the Redevelopment Plan and Existing Plans and the approval and
adoption of the Proposed Plan.
Resolution No. 2007 -14 Page 2
1.06. The Council hereby determines that it is necessary and in the best interests of the City and the
Authority at this time to approve and adopt the modifications to the Redevelopment Plan and Existing
Plans reflecting increased project costs and increased bonding authority within the Project Area, to
create the Proposed District and to approve and adopt the Proposed Plan relating thereto.
Section 2. General Findings.
2.01. The Council hereby finds, determines and declares that the assistance to be provided through
the adoption and implementation of the modified Redevelopment Plan, modified Existing Plans and
Proposed Plan (collectively, the "Plans ") are necessary to assure the development and redevelopment
of the Project Area.
2.02. The Council hereby finds, determines and declares that the Plans conform to the general plan
for the development and redevelopment of the City as a whole in that they are consistent with the
City's comprehensive plan.
2.03. The Council hereby finds, determines and declares that the Plans afford maximum opportunity
consistent with the sound needs of the City as a whole for the development and redevelopment of the
Project Area by private enterprise and it is contemplated that the development and redevelopment
thereof will be carried out pursuant to redevelopment contracts with private developers.
2.04. The Council hereby finds, determines and declares that the modification, approval and
adoption of the Plans is intended and, in the judgment of this Council, its effect will be to promote the
purposes and objectives specified in this Section 2 and otherwise promote certain public purposes and
accomplish certain objectives as specified in the Plans.
2.05. The Council hereby finds, determines and declares that the City made the above findings
stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the
Plans and Exhibit A to this Resolution.
Section 3. Specific Findings for the Proposed District.
3.01. The Council hereby finds, determines and declares that the Proposed District constitutes a
"tax increment financing district" as defined in Minnesota Statutes, Section 469.174, Subd. 9, and
further constitutes a "redevelopment district" as defined in Minnesota Statutes, Section 469.174,
Subd. 10.
3.02. The Council hereby finds, determines and declares that the proposed development or
redevelopment in the Proposed District, in the opinion of this Council, 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.
Resolution No. 2007 -14 Page 3
3.03. The Council hereby finds, determines and declares that the increased market value of a project
not receiving tax increment assistance would be less than the increased market value of a project
receiving tax increment assistance after deducting the present value of projected tax increments for
the maximum duration of the Proposed District.
3.04. The Council hereby finds, determines and declares that the expenditure of tax increment
within the Proposed District serves primarily a public purpose.
3.05. The Council hereby finds, determines and declares that the City made the above findings
stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the
Plans and Exhibit B to this Resolution.
Section 4. Approvals and Adoptions.
4.01. The modifications to the Redevelopment Plan reflecting increased project costs and increased
bonding authority within the Project Area are hereby approved and adopted by the Council of the
City.
4.02. The modifications to the Existing Plans reflecting increased project costs and increased
bonding authority within the Project Area are hereby approved and adopted by the Council of the
City.
4.03. The creation of the Proposed District within the Project Area and the adoption of the
Proposed Plan relating thereto are hereby approved by the Council of the City.
Section 5. Filing of Plans.
5.01. Upon approval and adoption of the Plans, the City shall request the Authority to cause said
Plans to be filed with the Minnesota Department of Revenue, the Office of the State Auditor and
Anoka County.
PASSED AND ADOPTED BY THE COUNCIL OF THE CITY THIS 26TH DAY OF FEBRUARY
2007.
SCOTT J. L - MA OR
ATTEST:
"dAq��? -
DEBRA A. SKOGEN OCITY CLERK
CERTIFICATION
I, Debra Skogen, the duly qualified Clerk of the City of Fridley, County of Anoka, Minnesota, hereby
certify that the f g is a true and correct copy of Resolution No. 7- ssed by the City
Council on the day of is
2007.
DEAR A SKO EN ITY CLERK
Resolution No. 2007 -14 Page 4
EXHIBIT A — GENERAL FINDINGS
The reasons and facts supporting the findings for the modification of the Plans for the Project Area,
Existing Districts and Proposed District pursuant to Minnesota Statutes, Section 469.175,
Subdivision 3, are as follows:
1. Finding that the assistance to be provided through the adoption and implementation of the
Plans is necessary to assure the development and redevelopment of the Project Area.
The tax increment assistance resulting from the implementation of the Plans is necessary for the
proposed project to proceed. Please refer to Exhibit XX -D of the Proposed Plan.
2. Finding that the Plans conform to the general plan for the development and redevelopment of
the City as a whole in that they are consistent with the City's Comprehensive Plan.
The Council has reviewed the Plans and has determined that they are consistent with the City's
comprehensive plan.
3. Finding that the Plans afford maximum opportunity, consistent with the sound needs of the
City as a whole, for the development and redevelopment of the Project Area by private enterprise,
and it is contemplated that the development or redevelopment thereof will be carried out pursuant to
development contracts with private developers.
Please refer to the attached Exhibit B for specific information relating to the Proposed District.
4. Finding that the approval and adoption of the Plans is intended and, in the judgment of this
Council, its effect will be to promote the public purposes and accomplish the objectives specified in
the Plans.
The tax increment that will be generated due to the approval and adoption of the Plans will assist
in financing the public improvements and eligible expenses as detailed in the Plans.
Resolution No. 2007 -14 Page 5
EXHIBIT B — SPECIFIC FINDINGS FOR PROPOSED DISTRICT
1. Finding that the Proposed District is a "redevelopment district' as defined in Minnesota
Statutes, Section 469.174, Subd. 10.
The Proposed District consists of a parcel of land and a portion of an adjacent parcel which has been
determined eligible for inclusion in a redevelopment district pursuant to Minnesota Statutes 469.174,
subdivision 10, which requires that (1) parcels consisting of 70% of the proposed tax increment
district contain improvements and (2) more than 50% of the buildings are determined to be
substandard. It has been determined that (1) the two parcels total approximately 540,442 square feet
and that parcels containing at least 83% of that total square footage contain improvements which
exceeds the required 70 %, and (2) that the single existing structure, or 100% of the structures, is
deemed substandard which exceeds the required 50% of buildings. These findings are documented in
a Report of Inspection Procedures and Results prepared by LHB, Inc. and dated January 31, 2007
2. Finding that the proposed development or redevelopment, in the opinion of the Council,
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.
Development activities proposed to occur in the Proposed District include land acquisition,
demolition and removal of an existing building, removal of a railroad spur, removal of old tornado
debris buried on the site, import of clean fill, removal of an asbestos pipe, additional remediation and
site preparation as required and the construction of an approximate 202,880 square foot
office /warehouse development in 2007. Upon completion of the development, it is anticipated that
the City's tax base will increase by approximately $7,685,627.
City staff has reviewed the estimated development costs and the available methods of financing and
has determined that tax increment assistance is necessary to make the development project economically
feasible and to allow the Redeveloper to proceed at this time.
3. Finding that the increased market value of a project not receiving tax increment financing
assistance would be less than the increased market value of a project receiving tax increment financing
assistance after deducting the present value of the projected tax increments for the maximum duration
of the Proposed District.
The original market value of the Proposed District is $2,458,373. City staff has determined that
without tax increment assistance these parcels would not be developed within the foreseeable future and
that only minimal remodeling would probably occur. Therefore, an increase in market value would be
minimal.
City staff has further determined that with tax increment assistance it is possible to construct an
approximate 202,880 square foot office /warehouse development with an estimated market value of
approximately $10,144,000. After deducting the original market value of $2,458,373 from the estimated
market value of $10,144,000, City staff has further determined that the increased market
Resolution No. 2007 -14 Page 6
value that could reasonably be expected to occur from a project receiving tax increment assistance would
be approximately $7,685,627.
City staff has further determined that the total amount of tax increment generated over the 25 year term of
the Proposed District approximates $5,163,175. Assuming the same term and a present value rate of
7.0 %, the present value of $5,163,175 approximates $1,972,847. After deducting the present value ofthe
tax increment ($1,972,847) from the increase in estimated market value occurring as a result of utilizing
tax increment assistance ($7,685,627), the net increase in estimated market values approximates
$5,712,780.
City staff has further determined that the increased market value of the site that could reasonably be
expected to occur without the use of tax increment financing ($0) is less than the increased market value of
the site occurring with the use of tax increment financing after subtracting the present value of the
projected tax increments for the maximum duration of the Proposed District ($5,712,780). Further
information supporting this Finding is attached as Schedule 1.
4. Finding that expenditure of tax increment serves a primarily public purpose.
The expenditure of tax increment is not intended as a private benefit and any such benefit is
incidental. Public benefits resulting from the proposed project include (i) an increase in the State and
City tax bases and (ii) the acquisition and redevelopment of property which is not now in its highest
or best use.
Resolution No. 2007 -14
EXHIBIT C — NUMERICAL "BUT FOR"
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITHOUT TIF ASSISTANCE
Page 7
Without tax increment assistance the parcels would not be developed within the foreseeable future
and only minimal remodeling may occur
Estimated Market Value ......................................... ............................... $ -0-
Original Market Value ............................................ ............................... $ 2,458,373
Increased Market Value .......................................... ............................... $ -0-
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITH TIF ASSISTANCE
With tax increment assistance it is proposed that an approximate 202,880 square foot
office /warehouse development be constructed in 2007.
Estimated Market Value ......................................... ............................... $10,144,000
Original Market Value ............................................ ............................... $ 2,458,373
Increased Market Value .......................................... ............................... $ 7,685,627
Less: Present Value of the Tax Increment
generated at 7.0% for the duration
of the Proposed District
(see attached Schedule 1) ........................... ............................... $ 1,972,847
Net Increased Market Value ................................... ............................... $ 51712,780