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HomeMy WebLinkAboutResolution No. 112-25 (EDA004-25) - EDA - Resolution - Development Plan for EDA District No. 85 and TIF Plan - Citywalk ApartmentJOINT RESOLUTION EDA RESOLUTION NO. COUNCIL RESOLUTION NO. Rochester Economic Development Authority Rochester City Council County of Olmsted, State of Minnesota Approving Economic Development District No. 85, and Economic Development Plan; Redevelopment Tax Increment Financing District No. 85-1 and Tax Increment Financing Plan WHEREAS, it has been proposed that the Rochester Economic Development Authority (the "EDA") establish Economic Development District No. 85 (the "Development District"), adopt the Economic Development Plan for the Development District (the "Development Plan"), establish Redevelopment Tax Increment Financing District No. 85- 1 (Citywalk Apartment Project) within the Development District (the "TIF District") and adopt a Tax Increment Financing Plan therefor (the "TIF Plan" and, together with the Development Plan, the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047, Sections 469.090 through 469.1082, Sections 469.174 through 469.1794 (collectively the "Act"), all as reflected in that certain document entitled in part "Economic Development Plan for Economic Development District No. 85 of the Rochester Economic Development Authority and Tax Increment Financing Plan for Redevelopment Tax Increment Financing District No. 85-1 (Citywalk Apartment Project)," dated May 19, 2024, and presented for consideration by the Board of Commissioners (the "Board") of the Rochester Economic Development Authority and the Common Council (the "Council") of the City of Rochester, Minnesota (the "City"). WHEREAS, the Council and the Board have investigated the facts relating to the establishment of the Development District, the adoption of the Development Plan, the establishment of the TIF District and the adoption of the TIF Plan. WHEREAS, the TIF District is being established to facilitate the construction of approximately 13 story, 340-unit luxury apartment development with amenities including underground parking (the "Development"), to be located at the southwest quadrant of the intersection of 2nd Street SW and 6th Avenue SW, Rochester, MN 55904 in the City (the "Development"). WHEREAS, certain written reports and other documentation (collectively, the "Reports") relating to the Plans, including the tax increment application made and other information supplied by Reuter Walton Development, LLC, a Minnesota limited liability company, or an affiliate thereof (the "Developer") as to the activities contemplated in the TIF District and the Blight Assessment for Citywalk Apartments Project, Rochester, Minnesota dated June 20, 2024, prepared by Widseth (the "Redevelopment TIF RC110-170-992900.v1 4937-7398-3292.2 Assessment") have heretofore been assembled or prepared by staff or others and submitted to the Council and the Board and/or made a part of the City and EDA files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to (1) the "studies and analyses" on why the TIF District meets the requirements to be a redevelopment tax increment financing district, (2) why the assistance satisfies the so-called "but for" test and (3) the bases for the other findings and determinations made in this resolution. The Council and the Board hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. WHEREAS, the EDA or the City has performed all actions required by law to be performed prior to the adoption and approval of the TIF Plan, including but not limited to notice to the County Commissioner representing the area of the County to be included in the TIF District, delivery of the TIF Plan to the County and School Board and the holding of a joint public hearing thereon by the City and the EDA following notice thereof published in the City's official newspaper at least 10 but not more than 30 days prior to the public hearing. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Rochester, Olmsted County, Minnesota, and the Board of Commissioners of the Rochester Economic Development Authority as follows: Section 1. Findings for the Adoption and Approval of the Plans. 1.01. The Council and the Board hereby find that the Development District is proper and desirable to establish in the City and the Development Plan will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Development District by private enterprise. 1.02. The Council and the Board hereby find that the TIF District is in the public interest and is a "redevelopment tax increment financing district within the meaning of Minnesota Statutes, Section 469.174, Subd. 10 because it consists of a project or portions of a project within which the following conditions, reasonably distributed throughout the District, exist: (1) parcels consisting of at least 70% of the area of the TIF District are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures and (2) more than 50% of the buildings located within the TIF District are deemed "structurally substandard" (within the meaning of Minnesota Statutes, Section 469.174, Subdivision 10(b) and (c)) to a degree requiring substantial renovation or clearance. Such conditions are reasonably distributed throughout the geographic area of the proposed TIF District. The TIF District consists of 5 parcels, and (1) 100% of the parcels (which is more than 70%) are "occupied" as defined in Minnesota Statutes, Section 469.174, Subd. 10(e), in that at least 15% of the area of each parcel is occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures and (2) there are four buildings in the TIF District, all of which (i.e. 100% of the buildings in the TIF District which is more than 50%) are structurally substandard to a degree requiring substantial renovation or 2 RC110-170-992900.v1 4937-7398-3292.2 clearance and the costs of bringing each structurally substandard building into compliance with building codes applicable to new buildings would exceed 15% of the cost of constructing new structures of the same size and type on the site. The Reports, including, without limitation, the Redevelopment TIF Assessment and the supporting facts for these determinations, are on file with the staff of the City. There have been no building permits issued or improvements made to the parcel or buildings since the date of the report. 1.03. The Council and the Board hereby make the following additional findings in connection with the TIF District: (a) The Council and the Board further find that the proposed Development, in the opinion of the Council and the Board, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being: The property on which the Development will occur would not be redeveloped for purposes consistent with the Development Plan in the reasonably foreseeable future. The estimated total redevelopment costs for this property make the total cost of this effort significantly higher than costs reasonably incurred for similar developments on a clean site. The demolition and redevelopment costs are higher than for new development and would make development infeasible. The developers of the Development have represented that they could not proceed with the Development without tax increment assistance. (b) The Council and the Board further find that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole. The specific basis for such finding being: The TIF Plan will generally complement and serve to implement policies adopted in the City's comprehensive plan. The City has determined that the Development proposed in the TIF Plan conforms to the City comprehensive plan and is or will be in substantial accordance with the existing zoning or any permitted exception for the property and is consistent with other uses in the area. The anticipated redevelopment of the project site and any subsequent demolition, reconstruction, or renovation related to the project will remain consistent with the City's design goals. (c) The Council and the Board further find that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of the TIF District by private enterprise. The specific basis for such finding being - RC 110-170-992900.v1 4937-7398-3292.2 The Development proposed to occur within the TIF District to be completed and operated by the Developer will afford maximum opportunity for the development of the applicable parcels consistent with the needs of the City. The Development will increase the taxable market valuation of the City. The Development will expand the number and type of available housing options in the City and help fulfill the need for such housing in the City. (d) For purposes of compliance with Minnesota Statutes, Section 469.175, Subdivision 3(b)(2)(ii), the Council hereby finds that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing is approximately $0, which is less than $176,913,102 which is the increase in the market value estimated to result from the proposed development (approximately $180,064,902, assuming 3.0% annual inflation) after subtracting the present value of the projected tax increments for the maximum duration of the TIF District (approximately $18,229,590). Thus, the use of tax increment financing will be a positive net gain to the City, the School District, and the County, and the tax increment assistance does not exceed the benefit which will be derived therefrom. 1.04. The City and the EDA elect to retain all of the captured tax capacity to finance the costs of the TIF District and the Development District. 1.05. The provisions of this Section 2 are hereby incorporated by reference into and made a part of the TIF Plan. 1.06. The Council and the Board further find that the Plans are intended and in the judgment of the Council and the Board their effect will be to promote the public purposes and accomplish the objectives specified therein. The Council and the Board also intend that the EDA shall have and enjoy, with respect to the Development District, the full range of powers and duties conferred upon the EDA pursuant to the Development Plan, the Act and such other legal authority as the EDA may have or enjoy from time to time. 1.07. The Development District and the TIF District are hereby established and the Plans, as presented to the Council and the Board 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 EDA, City or EDA staff shall, in writing, request the Olmsted County Auditor to certify the new TIF District and file the Plans with the Commissioner of Revenue and the Office of the State Auditor. 4 RC110-170-992900.v1 4937-7398-3292.2 PASSED AND ADOPTED BY THE BOARD OF COMMISSIONERS OF THE ROCHESTER ECONOMIC DEVELOPMENT AUTHORITY, THIS 19TH DAY OF MAY, 2025. PRESIDENT OF SAID AUTHORITY SECRETARY OF SAID AUTHORITY PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS ATTEST: CITY CLERK DAY OF , 2025. PRESIDENT OF SAID COMMON COUNCIL APPROVED THIS DAY OF MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 5 RC110-170-992900.v1 4937-7398-3292.2 2025.