RES 2012-73 - 14970RESOLUTION NO. 2012 -73
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING
PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. NOS. 6-7,9,11-13 AND
16 -20 TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONDING
AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1, CREATING TAX
INCREMENT FINANCING DISTRICT NO. 21 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. 6 -7, 9, 11 -13 and 16 -20 (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 of
proposed Tax Increment Financing District No. 21 ((the "Proposed District ") and adopt the
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 the 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 by law 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.
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
Res 2012 -73 Page 2
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 the 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 Redevelopment District.
3.01. The Council hereby finds, determines and declares that the Redevelopment 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 Redevelopment 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.
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 Redevelopment District.
Res 2012 -73 Page 3
3.04. The Council hereby finds, determines and declares that the expenditure of tax increment
within the Redevelopment 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 casts and
increased banding authority within the Project Area are hereby approved and adapted by the
Council of the City.
4.02. The modifications to the Existing Plans reflecting increased project casts and increased
banding authority within the Project Area are hereby approved and adapted 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 its approval and adoption of the modified Redevelopment Plan for the Project Area,
the City shall cause said Redevelopment Plan to be filed with the Minnesota Department of
Revenue, the Office of the State Auditor, and Anoka County.
5.02. Upon its approval and adoption of the Redevelopment Plan for the Redevelopment District,
the City shall cause said Redevelopment District Plan 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 8TH DAY OF
OCTOBER 2012.
1A4J9- KMMI�'
SCOTT LUND - NfAYOR
ATTEST:
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DEBRA SKOGEN - ITY CLERK
Res 2012 -73 Page 4
CERTIFICATION
I, Debra Skagen, the duly qualified Clerk of the City of Fridley, County of Anoka, Minnesota,
hereby certify that the foregoing is a true and correct copy of Resolution No. 2012-73 passed by
the City Council on the St day of October , 2012.
&&gm-d
DEBRA SKOGEN IgCITY CLERK
Res 2012 -73
GENERAL FINDINGS
Page 5
EXHIBIT A
The reasons and facts supporting the findings for the modification of the Plans for the Project
Area, Existing Districts and Proposed Districts 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 XXIII -D of the Redevelopment 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.
Res 2012 -73
SPECIFIC FINDINGS FOR THE REDEVELOPMENT DISTRICT
Page 6
I0.4011:0118*a]
In addition to the findings included in Exhibit A, the reasons and facts supporting the additional
findings for the Redevelopment Plan for the Redevelopment District pursuant to Minnesota
Statutes, Section 469.175, Subdivision 3, are as follows:
1. Finding that the Redevelopment District is a "redevelopment district" as defined in
Minnesota Statutes.
The Redevelopment District consists of 18 parcels totaling approximately 6.4 acres. Of this
acreage, it has been determined that parcels comprising 100% of the Redevelopment District are
occupied by buildings, streets, utilities, paved or gravel parking lots or similar structures. This
100% area coverage exceeds the 70% coverage test required by Minnesota Statutes, Section
469.174, Subdivision 10(1). Additionally, 10 of the 11 buildings located on twelve parcels have
been determined to be "structurally substandard" because they contain defects in structural elements
or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire
protection including adequate egress, layout and condition of interior partitions, or similar factors,
which defects or deficiencies are of sufficient total significance to justify substantial renovation or
clearance. These ten buildings satisfies the requirements of Minnesota Statutes, Section 469.174,
Subdivision 10(1) which requires that over 50% of buildings, not including outbuildings, must be
found "structurally substandard." It has further been determined that these conditions are
reasonably distributed through the Redevelopment District. Information supporting these findings
are on file at City Hall.
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 Redevelopment District includes land
acquisition, demolition of buildings, remediation of the Site and construction of approximately
9000 square feet of office /commercial, 100 units of multi - family market rate rental units and 24
single family housing units. Upon completion of the development, it is anticipated that the City's
tax base will increase by approximately $8.0 M to $10.0 M.
City and HRA staff have reviewed the estimated development costs and the available methods of
financing and has determined that tax increment assistance is necessary to make the
redevelopment project economically feasible and to allow Redevelopment 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 Redevelopment District.
Res 2012 -73 Page 7
The original market value of the Redevelopment District is approximately $2,000,000. City staff
has determined that without tax increment assistance these parcels would not be developed within
the foreseeable future and that only minimal remodeling or improvements would probably occur.
Therefore, if there was an increase in market value it would be minimal.
City staff has further determined that with tax increment assistance it is possible to construct
approximately 9000 square feet of office /commercial, 100 units of multi - family market rate rental
units and 24 single family housing units with an estimated market value of approximately
$12,000,000 After deducting the original market value of $2,000,000 from the estimated market
value of $12,000,000, City staff has further determined that the increased market value that could
reasonably be expected to occur from a project receiving tax increment assistance would be
approximately $10,000,000.
City staff has further determined that the total amount of tax increment generated over the 26 year
term of the Redevelopment District approximates $8,400,000. Assuming the same term and a
present value rate of 4.0 %, the present value of $8,400,000 approximates $4,000,000. After
deducting the present value of the tax increment ($4,000,000) from the increase in estimated market
value occurring as a result of utilizing tax increment assistance ($10,000,000), the net increase in
estimated market values approximates $6,000,000.
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 Redevelopment District
($6,000,000). 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, (ii) the acquisition and redevelopment of property which is not now in its
highest or best use, (iii) demolition and removal of an existing substandard and blighted
structures, and (iv) remediation of contaminated property.
Res 2012 -73
NUMERICAL "BUT FOR"
Page 8
EXHIBIT B
SCHEDULE 1
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITHOUT TIF ASSISTANCE
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 ........................................... ............................... $ 2,000,000
Increased Market Value .......................................... ............................... $ -0-
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITH TIF ASSISTANCE
With tax increment assistance it is proposed that approximately 9,000 square feet
office /commercial, 100 units of multi - family market rate rental units and 24 single family
housing units will be constructed in at least four phases over 4 years.
Estimated Market Value ......................................... ............................... $ 12,000,000
Original Market Value ........................................... ............................... $ 2,000,000
Increased Market Value .......................................... ............................... $ 10,000,000
Less: Present Value of the Tax Increment
generated at 4.0% for the duration
of the Proposed Redevelopment District .... ............................... $ 4,000,000
Net Increased Market Value ................................... ............................... $ 61000,000
MMB: 4848 - 6306 -2801, v. 1