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HomeMy WebLinkAboutResolution No. 258-18 - Wells Fargo. TIF Plan RESOLUTION NO. ______ CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT DISTRICT AND ECONOMIC DEVELOPMENT PLAN THEREFOR AND APPROVING A REDEVELOPMENT TAX INCREMENT FINANCING DISTRICT AND A TAX INCREMENT FINANCING PLAN THEREFOR BE IT RESOLVED by the Common Council (the “Council”) of the City of Rochester, Minnesota (the “City”), as follows: Section 1. Recitals. 1.01. It has been proposed that the Rochester Economic Development Authority (the “EDA”) establish Economic Development District No. 69 (the “Development District”), adopt the Economic Development Plan for the Development District (the “Development Plan”), establish DMC Redevelopment Tax Increment Financing District No. 69-1 (21 1st Street SW 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 (the “TIF Act”), and Minnesota Statutes, Sections 469.40 to 469.47 (the “DMC Act”), all as amended (collectively, the “Act”); all as reflected in that certain document entitled in part “Economic Development Plan for Economic Development District No. 69 of the Rochester Economic Development Authority and Tax Increment Financing Plan for DMC Redevelopment Tax Increment Financing District No. 69-1 (21 1st Street SW Project),” dated July 16, 2018, and presented for the Council’s consideration. 1.02. The Council has 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. 1.03. The TIF District is being established to facilitate the renovation of the existing Wells Fargo building to, among other things, reconstruct the building exterior, redesign the atrium to better integrate with Peace Plaza, correct building code conditions, and improve connections between subway, skyway and street level pedestrian walkways to be located at 21 1st Street SW in the City (the “Development”). 1.04. Certain written reports and other documentation (collectively, the “Reports”) relating to the Plans, including the tax increment application made and other information supplied by HSRE-Ryan 1, LLC, a Minnesota limited liability company or an affiliate thereof (the “Developer”) as to the activities contemplated therein have heretofore been assembled or prepared by staff or others and submitted to the Council and/or made a part of the City and EDA files and proceedings on the Plans. The Reports include data, information and/or substantiation 529228v1 RC110-100 constituting or relating to (1) why the assistance satisfies the so-called “but for” test and (2) the bases for the other findings and determinations made in this resolution. The Council 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. 1.05. The TIF District is located within the boundaries of the Destination Medical Center Development District as defined in Minnesota Statutes, Section 469.40, Subdivision 5, as amended (the “DMC District”) as adopted in the Destination Medical Center Development Plan as defined in Minnesota Statutes, Section 469.40, Subdivision 6, as amended (the “DMC Development Plan”) and within the Heart of the City subdistrict as described in the DMC Development Plan. The DMCC has approved the Development. 1.06. 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. Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The Council hereby finds 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. 2.02. The Council hereby finds that the TIF District is in the public interest and is a “redevelopment tax increment financing district within the area of the destination medical center development district to fund public infrastructure projects” within the meaning of Minnesota Statutes, Section 469.45, Subd. 4. Pursuant to the DMC Act, the EDA may establish a redevelopment tax increment financing district within the DMC District without meeting the requirements for redevelopment districts created pursuant to the general TIF Act, specifically, Minnesota Statutes, Sections 469.174, subdivision 10. 2.03. The Council hereby makes the following additional findings in connection with the TIF District: (a) The Council further finds that the proposed Development, in the opinion of the Council, 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 developed for purposes consistent with the DMC Development Plan in the reasonably foreseeable future. The redevelopment costs are higher than for new development. The Developer has represented that it could not proceed with the Development without tax increment assistance. 2 529228v1 RC110-100 (b) The Council further finds 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 existing building to be renovated complies with existing zoning for the property. The Development is consistent with the DMC Development Plan. (c) The Council further finds 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: 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, improve the quality of office space in the City and further the purposes of the DMC Development Plan. (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 $5,756,633 which is the increase in the market value estimated to result from the proposed development (approximately $8,363,300, assuming no annual inflation) after subtracting the present value of the projected tax increments for the maximum duration of the TIF District (approximately $2,606,667). 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. 2.04. The City elects to retain all of the captured tax capacity to finance the costs of the TIF District and the Development District. 2.05. The provisions of this Section 2 are hereby incorporated by reference into and made a part of the TIF Plan. 2.06. The Council further finds that the Plans are intended and in the judgment of the Council its effect will be to promote the public purposes and accomplish the objectives specified therein. The City also intends that the EDA shall have and enjoy, with respect to the DMC Development District, the full range of powers and duties conferred upon the EDA pursuant to the Development Plan, the TIF Act, the DMC Act and such other legal authority as the EDA may have or enjoy from time to time. 2.07. The Development District and the TIF District are hereby established and the Plans, as presented to the Council 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 City Administrator. Upon approval by the 3 529228v1 RC110-100 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. 2.08. The Council finds that the Development is a public infrastructure project within the meaning of Minnesota Statutes, Section 469.40, subdivision 11, which provides for: acquiring real property and other assets associated with the real property; demolishing, repairing or rehabilitating buildings; installing, constructing or reconstructing elements of public infrastructure required to support the overall development of the DMC Development District; acquiring, constructing or reconstructing, or equipping parking facilities and other facilities to encourage intermodal transportation and public transit; making related site improvements; and preparing land for private development; and that the City approves the Development as consistent with the DMC Development Plan. Section 3. Interfund Loans. 3.01. The Council hereby approves a policy on interfund loans or advances (“Loans”) for the TIF District, as follows: (a) The authorized tax increment eligible costs (including without limitation out-of-pocket administrative expenses in an amount up to $268,983, interest in an amount up to $1,861,991 and other project costs in an amount up to $3,248,983) payable from the TIF District, as its TIF Plan is originally adopted or may be amended, may need to be financed on a short-term and/or long-term basis via one or more Loans, as may be determined by the City Finance Director from time to time. (b) The Loans may be advanced if and as needed from available monies in the City’s general fund or other City fund designated by the City Finance Director. Loans may be structured as draw-down or “line of credit” obligations of the lending fund(s). (c) Neither the maximum principal amount of any one Loan nor the aggregate principal amount of all Loans may exceed $5,379,957 outstanding at any time. (d) All Loans shall mature not later than February 1, 2047 or such earlier date as the City Finance Director may specify in writing. All Loans may be pre-paid, in whole or in part, whether from tax increment revenue, tax increment revenue bond proceeds or other eligible sources. (e) The outstanding and unpaid principal amount of each Loan shall bear interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Sections 270C.40 or 549.09 at the time a Loan, or any part of it, is first made, subject to the right of the City Finance Director to specify a lower rate (but not less than the City’s then-current average investment return for similar amount and term). (f) Such Loans within the above guidelines are pre-approved. The Loans need not take any particular form and may be undocumented, except that the City 4 529228v1 RC110-100 Finance Director shall specify the principal amount and interest rate and maintain all necessary or applicable data on the Loans. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS _______DAY OF _________ 2018. _______________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: _________________________ CITY CLERK Approved this ____ day of ________, 2018. _______________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 5 529228v1 RC110-100