Res 2018-30 Mod Redev Plan for Northern StacksRESOLUTION NO. 2018 - 30
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX
INCREMENT FINANCING PLANS FOR TAX INCREMENT
FINANCING DISTRICTS NOS. 6, 9, 11-13 AND 17-23 TO
REFLECT INCREASED PROJECT COSTS AND INCREASED
BONDING AUTHORITY WITHIN REDEVELOPMENT
PROJECT NO. 1, CREATING TAX INCREMENT FINANCING
DISTRICT NO. 24 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, 9, 11-13 and 17-23 (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. 24 (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 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. 2018 - 30 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
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 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 "soils condition district" as defined in Minnesota Statutes, Section 469.174,
Subd. 19.
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.
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
Resolution No. 2018 - 30 Page 3
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 its 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 11TH DAY OF JUNE,
2018.
SCOTT J. LUND - MAYOR
ATTEST:
DEBRA A. SKOGEN - CITY CLERK
Resolution No. 2018 - 30
CERTIFICATION
Page 4
I, Debra Skogen, 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. 2018 - 30 passed by the City Council
on the 11th day of June, 2018.
DEBRA A. SKOGEN - CITY CLERK
Resolution No. 2018 - 30
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 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 XXVI-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. 2018 - 30 Page 6
FX14TBTT R
SPECIFIC FINDINGS FOR THE PROPOSED DISTRICT
In addition to the findings included in Exhibit A, the reasons and facts supporting the additional findings for
the Proposed District pursuant to Minnesota Statutes, Section 469.175, Subdivision 3, are as follows:
1. Finding that the Proposed District is a "soils condition district" as defined in Minnesota
Statutes.
The Proposed District, which is a single parcel of land, is eligible for inclusion in a soils condition
district as provided for in Minnesota Statutes Section 469.174, Subd. 19 (the "Definition Section") for the
following reasons:
1. The parcel size is approximately 508,000 square feet.
2. The costs of the cleanup, including preparation of the development action response plan
("DARP") and the allocable administrative expenses of the Authority, exceed as allowed
by Minn. Stat. Section 469.176, Subd. 4b, exceed $1,600,000 (the "Eligible Costs").
3. The Definition Section provides for inclusion of the parcel if the Eligible Expenses exceed
2.00/square feet for the area of the parcel.
4. $1,600,000 (Eligible Expenses) is greater than 1,016,000 (508,000 (parcel size) x 2).
The Eligible Costs to implement the DARP or response action plan, will include the following:
• Renovation of the existing commercial/industrial buildings at the Site to allow for the
Vapor Mitigation construction;
• Construction of heavy-duty drive and truck court pavements as engineered barriers for
contaminated soil;
• Construction of light duty parking and drive pavements as engineered barriers for
contaminated soil;
• Additions to the permanent storm water conveyance system and construction of a new
storm water pond to prevent storm water infiltration through contaminated soil;
• Construction of green space areas by removal of contaminated soil; and
• Modification of the existing grades at the Site through excavation and placement of
contaminated soil.
Additional information may be obtained from reports on file with the assistant executive director of the
Authority.
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
Resolution No. 2018 - 30 Page 7
reasonably foreseeable future and, therefore, the use of tax increment financing is deemed
necessary.
Activities proposed to occur in the Proposed District include the following:
Environmental Activities:
• Remediation of site soils impacted with volatile organic compounds, polycyclic
aromatic hydrocarbons and Resource Conservation and Recovery Act metals and
construction debris;
• Installation of Vapor Treatment System under the existing building floor; and
• Construction of new green spaces and utility corridors by removing contaminated soil.
Redevelopment Activities:
• Relocate semi -trailer storage area against the west building facade;
• Create new storm water pond on SW corner of site (currently semi trailer storage);
• Paint building Stacks gray;
• Add Architectural elements to building to match it to Northern Stacks' design (See
attached elevations);
• Remove old Roof top unit;
• Demolish former 2 -story office;
• Rebuild existing parking lots and truck courts;
• Improve interior floor slabs in areas that have been damaged;
• Upgrade sprinkler system to ESFR; and
• Replace roof.
Upon completion of the above activities, it is anticipated that the City's tax base will increase by
approximately $3.8M.
City and HRA staff have reviewed the estimated development costs and the available methods of
financing and have determined that tax increment assistance is necessary to make the redevelopment
project economically feasible and to allow redevelopment to proceed at this time and in the foreseeable
future.
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 approximately $6,700,000. City staff has
determined that without tax increment assistance this parcel would not be remediated or the building
renovated so there would be minimal, if any, increase in market value.
Resolution No. 2018 - 30 Page 8
City staff has further determined that with tax increment assistance it is possible to remediate the site and
renovate the existing building to generate an estimated market value of approximately $10.5 million. After
deducting the original market value of $6.7 million from the estimated market value of $10.5 million, 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 $3.8 million.
City staff has further determined that the total amount of tax increment generated over the 21 year term of
the Proposed District approximates $3.3 million. Assuming the same term and a present value rate of
5.5%, the present value of $3.3 million approximates $1.57 million. After deducting the present value of
the tax increment ($1.57 million) from the increase in estimated market value occurring as a result of
utilizing tax increment assistance ($3.8 million), the net increase in estimated market values approximates
$2.23 million.
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 (minimal, if any) 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 ($2.23 million). 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 renovation of property which is not now in its highest or best use, and
(iii) remediation of contaminated property.
Resolution No. 2018 - 30 Page 9
SCHEDULE 1 TO EXHIBIT B — NUMERICAL "BUT FOR"
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITHOUT TIF ASSISTANCE
Without tax increment assistance the parcel would not be remediated or the existing building
renovated so minimal, if any increase in market value is anticipated.
Estimated Market Value........................................................................
$
0.00 million
Original Market Value...........................................................................
$
6.70 million
Increased Market Value.........................................................................
$
0.00 million
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITH TIF ASSISTANCE
With tax increment assistance it is proposed that the site would be remediated and the building
renovated.
Estimated Market Value........................................................................ $ 10.50 million
Original Market Value........................................................................... $ 6.70 million
Increased Market Value......................................................................... $ 3.80 million
Less: Present Value of the Tax Increment
generated at 5.5% for the duration
of the Proposed District............................................................ $ 1.57 million
Net Increased Market Value.................................................................. $ 2.23 million