HomeMy WebLinkAboutResolution No. 470-13•
CITY OF ROCHESTER
COUNTY OF OLMSTED
STATE OF MINNESOTA
RESOLUTION NO. �Jb -/3
RESOLUTION APPROVING A REDEVELOPMENT PROJECT AND REDEVELOPMENT
PLAN THEREFOR AND APPROVING A 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 Redevelopment Project No. 41 (the "Redevelopment Project"), adopt the
Redevelopment Plan for the Redevelopment Project (the "Redevelopment Plan"), establish Tax
Increment Financing District No. 41-1 within the Redevelopment Project (the "TIF District") and
adopt a Tax Increment Financing Plan therefor (the "TIF Plan" and, together with the
Redevelopment 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 "Redevelopment Plan for Redevelopment Project No. 41 of
the Rochester Economic Development Authority and Tax Increment Financing Plan for Tax
Increment Financing District No. 41-1," dated September 16, 2013, and presented for the
Council's consideration.
1.02. The Council has investigated the facts relating to the establishment of the
Redevelopment Project, the adoption of the Redevelopment Plan, the establishment of the TIF
District and the adoption of the TIF Plan.
1.03. The EDA has performed all actions required by law to be performed prior to the
adoption and approval of the TIF Plan, including but not limited 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 public hearing by the City
thereon following notice thereof published in the City's official newspaper at least 10 but not
more than 30 days prior to the public hearing.
1.04. Certain written reports and other documentation (collectively, the "Reports")
relating to the Plan, including the tax increment application made and other information supplied
by City Center I LLC, a Minnesota limited liability company (the "Company") as to the activities
contemplated therein and the property inspection report supplied by CRW Architecture & Design
Group, Inc., dated July 11, 2013 (the "Inspection Report") 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 Plan. The Reports include data, information and/or substantiation
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constituting or relating to (1) the "studies and analyses" on why the TIF District meets 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.
Section 2. Findings for the Adoption and Approval of the Plans.
2.01. The Council hereby finds that: (a) the land within the Redevelopment Project area
would not be available for redevelopment without the financial aid to be sought under the
Redevelopment Plan; (b) the Redevelopment Plan will afford maximum opportunity, consistent
with the needs of the City as a whole, for the development of the Redevelopment Project by
private enterprise; and (c) the Redevelopment Plan conforms to the general plan for the
development of the City as a whole.
2.02. The Council finds that the Redevelopment Project constitutes a "blighted area" as
well as, in part, an area that is underused or inappropriately used, within the meaning of
Minnesota Statues, Section 469.002, subd. 11 and Section 469.028, subd. 4.
2.03. The Council further finds that the demolition, clearance, and related activities to
redevelop the Redevelopment Project, all in accordance with the Redevelopment Plan, constitute
a "redevelopment project" within the meaning of Minnesota Statues, Sections 469.002, subd. 14
and Section 469.028, subd. 4.
• 2.04. The Council hereby finds that the TIF District is in the public interest and is a
"redevelopment district" within the meaning of Minnesota Statutes, Section 469.174,
Subdivision 10, because the TIF District consists of a project or portions of a project within
which the following conditions, reasonably distributed throughout the TIF 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)) to a degree requiring
substantial renovation or clearance. The TIF District consists of 1 parcel and the parcel is
"occupied" as defined in Minnesota Statutes, Section 469.174, Subd. I0(a)(1) in that at least 15%
of the area of the parcel is occupied by buildings, streets, utilities, paved or gravel parking lots or
similar structures. There is 1 building currently located in the TIF District and the building is
"structurally substandard" to a degree requiring substantial renovation or clearance. The
"structurally substandard" building is not in compliance with the building code applicable to new
buildings, and the costs of modifying such building to satisfy the building code is more than 15%
of the cost of constructing a new structure of the same square footage and type on the site. The
reasons and support facts for these determinations are set forth in the Inspection Report, which is
incorporated herein by reference, and a copy of which is on file with the City Administrator.
•
2.05. The Council hereby makes the following additional findings in connection with
the TIF District:
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(a) The Council further finds that the proposed development, in the opinion of
the Common 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 project will occur would not be developed in
the reasonably foreseeable future. The demolition, renovation and
redevelopment costs are higher than for new development. The Company
has represented that it could not proceed with the project without tax
increment assistance.
(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 compliment and serve to implement policies
adopted in the City's comprehensive plan. The commercial facility
contemplated on the property is in accordance with the existing zoning for
the property.
(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 proposed development to occur within the TIF District is the
demolition of an existing substandard building and construction by the
Company of a 15,000 square foot or greater commercial facility and all
related improvements to be completed, owned and operated by the
Company (the "Development") and will afford maximum opportunity for
the development of the applicable parcel consistent with the needs of the
City. The development will increase the taxable market valuation of the
City, and the available commercial facilities in the City.
•
(d) For purposes of compliance with Minnesota Statutes, Section 469.175,
Subdivision 3(2), the City Council hereby finds that the increased market value of the
property to be developed within the Tax Increment District that could reasonably be
expected to occur without the use of tax increment financing is $0, which is less than the
increased market value estimated to result from the proposed development (i.e.,
$1,689,400) after subtracting the present value of the projected tax increments for the
maximum duration of the Tax Increment Financing District (i.e., approximately
$322,961). In making these findings, the City Council has noted that the property has not
been redeveloped for many years and would likely remain so if tax increment financing is
not available. 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.
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2.06. The City elects to retain all of the captured tax capacity to finance the costs of the
TIF District. The City elects the method of tax increment computation set forth in Minnesota
Statutes, Section 469.177, Subd. 3(a).
2.07. In accordance with Minnesota Statutes, Section 469.47, Subdivision 4, the City
and the EDA propose to provide funding for a public infrastructure project within the area that
will be in the Destination Medical Center Development District as defined in Minnesota Statutes,
Section 469.40, Subdivision 5, as amended after the effective date of the DMC Act but before
the Destination Medical Center Development Plan as defined in Minnesota Statutes, Section
469.40, Subdivision 6, as amended (the "DMC Plan") in anticipation that the TIF Plan and the
Development will be approved by the Destination Medical Center Corporation as defined in
Minnesota Statutes, Section 469.40, Subdivision 4, as amended.
2.08. The provisions of this Section 2 are hereby incorporated by reference into and
made a part of the TIF Plan.
2.09. 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 and in the DMC Plan.
Section 3. Approval and Adoption of the Plans; Policy on Interfund Loans and
Advances.
3.01. 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 Clerk. Upon
approval by the EDA, City 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.
3.02. 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) 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 the adopted and, if,applicable, amended TIF
Plan budget for the TIF District.
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• (d) The maximum term of any Loan shall not exceed the lesser of the
statutory duration limit of the TIF District 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, TIF 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 270.75 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
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 COMMO COUNCI OF THE CITY OF
ROCHESTER, MINNESOTA, THIS 16TH DAY OF SE BE
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P SA SIDENT O ID CO ON COUNCIL
ATTEST:
CITY CLER sy6puTV
Approved this r141 day of September, 2013.
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MAYOR OF SAID CITY
(Seal of the City of
Rochester, Minnesota)
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