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HomeMy WebLinkAboutResolution No. 274-20 - D1 -_TIF_74-1_Discovery_Square_2_DEVELOPMENT_AGREEMENT_AND_REMOVAL_OF_PARCEL EDA RESOLUTION NO. ______ COUNCIL RESOLUTION NO. ______ Resolution Authorizing the Execution of a Development Assistance Agreement Related to DMC Redevelopment Tax Increment Financing District No. 74-1 (Two Discovery Square Project) and Removing a Parcel from DMC Redevelopment Tax Increment Financing District No. 62-1 (Mortenson Discovery Square Phase I). WHEREAS, on April 20, 2020 the Common Council (the “Council”) of the City of Rochester, Minnesota (the “City”) jointly with the Board of Commissioners (the “Board”) of the Rochester Economic Development Authority (the “EDA”), held a public hearing relating to the proposal that the EDA (i) establish Economic Development District No. 74 (the “Development District”); (ii) adopt an Economic Development Plan for the Development District; (iii) establish DMC Redevelopment Tax Increment Financing District No. 74-1 (Two Discovery Square Project) (the “TIF District”) therein; (iv) adopt a Tax Increment Financing Plan therefor; all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 through 469.1082, 469.174 through 469.1794, and 469.40 through 469.47, as amended and (v) remove a portion of Parcel Identification Number 640212083796 from DMC Redevelopment Tax Increment Financing District No. 62-1 (Mortenson Discovery Square Phase I); WHEREAS, after said public hearing the EDA approved the TIF District and a Development Assistance Agreement (the “Agreement”) between the EDA and Rochester 2 Associates, LLC, an affiliate of Mortenson Development, Inc. (the “Developer”), stating the Developer’s responsibilities to construct an approximately an approximately 5-story, 121,000 square foot bioscience building, including rentable lab, office, multi-purpose, and collaborative, spaces (the “Project”) and the terms and conditions of the EDA’s assistance with financing certain costs of the Project; WHEREAS, the Developer has requested that the EDA approve certain changes to the terms of the Agreement which has not yet been executed by the parties; and WHEREAS, prior to the certification of the TIF District the City and the EDA must authorize the removal of the portion of Parcel Identification Number 640212083796 which has been replatted as Lot 1, Block 1, Discovery Square Second (the “Parcel”) from DMC Redevelopment Tax Increment Financing District No. 62-1 (Mortenson Discovery Square Phase I) (the “Phase I TIF District”) thereby reducing the size thereof (the “TIF Plan Modification”); WHEREAS, the current net tax capacity of the Parcel is at least equal to its original net tax capacity as certified in connection with the establishment of the Phase I TIF District, 1 RC110-114-677953.v3 and therefore this TIF Plan Modification may be accomplished without notice or hearing pursuant to Section 469.175, Subdivision 4(e)(2)(A) of the TIF Act; WHEREAS, the EDA and City have investigated the facts relating to the TIF Plan Modification and have performed all actions required by law to be performed prior to the adoption and approval of the proposed TIF Plan Modification, including, but not limited to, notification of Hennepin County and the School District, having taxing jurisdiction over the property in the Phase I TIF District, and the holding by the City of a public hearing on the April 20, 2020 upon published notice as required by law; and NOW, THEREFORE, BE IT RESOLVED by the City Council (the “Council”) of the City of Rochester, Minnesota (the “City”) and by the Board of Commissioners (the “Board”) of the Rochester Economic Development Authority (the “EDA”), as follows: 1. The Council and the Board hereby reaffirms the original findings for the Phase I TIF District, including the finding that when the Phase I TIF District was established, the Phase I TIF District was, and currently is, a DMC redevelopment district and that, in the opinion of the Council and the Board, (i) the proposed development of the property therein would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; (ii) the increased market value of the property therein that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the tax increment financing plan for the Phase I TIF District; (iii) that the TIF Plan Modification conforms to the general plan for the development or redevelopment of the City as a whole; (iv) that the TIF Plan Modification will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the project by private enterprise, which findings are further supported by the resolutions of the City and the EDA, adopted on April 20, 2020, establishing the TIF District in connection with the proposed development of the Parcel. 2. The adoption of the TIF Plan Modification conforms in all respects to the requirements of the Act and will help provide opportunities for additional redevelopment and will improve the tax base. These public purposes and benefits exceed any benefits expected to be received by private developers, who will receive assistance only in the amount needed to make the proposed development on the Property financially feasible. 3. The Phase I TIF District and the tax increment financing plan therefor are hereby amended to remove the Parcel and the TIF Plan Modification is hereby approved. 4. City staff are authorized to file this resolution as evidence of the TIF Plan Modification with the Commissioner of Revenue, the Office of the State Auditor and the Olmsted County Auditor. 5. City staff, the City’s advisors and legal counsel are authorized and directed to proceed with the implementation of the TIF Plan Modification and the removal of the 2 RC110-114-677953.v3 Parcel from DMC Redevelopment Tax Increment Financing District No. 62-1 (Mortenson Discovery Square Phase I). 6. The Developer has presented the EDA with a proposal for the construction by the Developer of the Project, and there has been prepared and presented to the Board for its consideration the Agreement, stating the Developer’s responsibilities and the terms and conditions the EDA’s assistance with the financing of certain costs of the Project. 7. The Board hereby approves the Agreement substantially in accordance with the terms set forth in the form presented to the Board, together with any related documents necessary in connection therewith, including without limitation all documents, consents or certifications referenced in or attached to the Agreement (collectively, the “Development Documents”) and hereby authorizes the President and Secretary, in their discretion and at such time, if any, as they may deem appropriate, to execute the same on behalf of the EDA, and to carry out, on behalf of the EDA, the EDA’s obligations thereunder; provided however that this authorization by the EDA shall expire if the Developer has not within 180 days after the date hereof (i) executed the Agreement, (ii) obtained a permit and commenced construction of the foundation of the Project, and (iii) delivered to the EDA evidence reasonably acceptable to the EDA that the Developer has commitments for sufficient financing for, or other adequate financial resources available for and committed to the completion of the Project. Prior to the expiration of such 180 period, the Developer may request an extension from the Board of Commissioners of the EDA. 8. The approval hereby given to the Development Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the EDA and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the EDA. The execution of any instrument by the appropriate officers of the EDA herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. This Resolution shall not constitute an offer and the Development Documents shall not be effective until the date of execution thereof as provided herein. 9. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney, may act in their behalf. Upon execution and delivery of the Development Documents, the officers and employees of the EDA are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the EDA to implement the Development Documents, including without limitation the issuance of the TIF Note thereunder, when all conditions precedent thereto have been satisfied. 10. The Board hereby determines that the execution and performance of the Development Documents will help realize the public purposes of the Act. 3 RC110-114-677953.v3 PASSED AND ADOPTED BY THE BOARD OF COMMISSIONERS OF THE TH ROCHESTER ECONOMIC DEVELOPMENT AUTHORITY, THIS 5 DAY OF OCTOBER, 2020. PRESIDENT OF SAID AUTHORITY SECRETARY OF SAID AUTHORITY 4 RC110-114-677953.v3 PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2020. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2020. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 5 RC110-114-677953.v3