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HomeMy WebLinkAboutResolution No. 471-13ROCHESTER ECONOMIC DEVELOPMENT AUTHORITY • COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION NO. RESOLUTION APPROVING A REDEVELOPMENT PROJECT AND REDEVELOPMENT PLAN THEREFOR AND APPROVING A TAX INCREMENT FINANCING DISTRICT AND A TAX INCREMENT FINANCING PLAN THEREFOR AND AUTHORIZING THE EXECUTION OF A DEVELOPMENT AGREEMENT BE IT RESOLVED by the Board of Commissioners (the `Board") of the Rochester Economic Development Authority (the "EDA"), as follows: Section 1. Recitals. 1.01. It has been proposed that the EDA establish Redevelopment Project No. 41 (the "Redevelopment Project"), and establish Tax Increment Financing District No. 41-1 within the Redevelopment Project. (the "TIF 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 Board's consideration. 1.02. The Board 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 of Rochester, Minnesota (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 431388v1 RC110-38 • 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 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 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. Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The Board 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 Board 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 Board further finds that the demolition, clearance, and related activities to redevelop the Redevelopment Project, all in accordance with the Redevelopment Plan, constitute isa "redevelopment project" within the meaning of Minnesota Statues, Sections 469.002, subd. 14 and Section 469.028, subd. 4. 2.04. The Board 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. 10(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. is TIF The Board hereby makes the following additional findings in connection with the TIF District: 2 431388v1 RC110-38 (a) The Board further finds that the proposed development, in the opinion of • the Board of Commissioners, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. (b) The Board further finds that the Tax Increment Financing Plan conforms to the general plan for the development or redevelopment of the City as a whole. (c) The Board further finds that the Tax Increment Financing Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of the Tax Increment Financing District by private enterprise. (d) For purposes of compliance with Minnesota Statutes, Section 469.175, Subdivision 3(2), the Board 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 Board 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. • 2.06. The provisions of Section 2 are hereby incorporated by reference into and made a part of the TIF Plan. 2.07. The Board 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. 2.08. The Plan, as presented to 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. EDA staff shall, in writing, request the Olmsted County Auditor to certify the new Tax Increment District. Section 3. Approval of Development Agreement. 3.01. The Company has presented the EDA with a proposal for 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 there has been prepared a certain Development Agreement (the "Agreement") between the EDA and the Company, stating the terms and conditions of such Development and the EDA's and the Company's responsibilities respecting the assistance thereof, has been presented to the Board for its consideration. • 4313880 RC110-38 • 3.02. The Board hereby approves the Agreement, together with any related documents necessary in connection therewith (collectively, the "Development Documents") substantially in theform presented to the Board 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. 3.03. 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. 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 3.04. 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 Tax Increment Revenue Bond thereunder. • 3.05. The Board hereby determines that the execution and performance of the Development Documents will help realize the public purposes of the Act. Section 4. Interf ind Loans. 4.01. The Board 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 District, as its Tax Increment 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 or EDA's general fund or other City or EDA 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 Tax Increment Plan budget for the Tax Increment District. • (d) The maximum term of any Loan shall not exceed the lesser of the statutory duration limit of the Tax Increment District or such earlier date as the City 4 431388v1 RC110-38 . Finance Director may specify in writing. All Loans may be pre -paid, in whole or in part, whether from tax increment revenue, tax increment 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 maintain all necessary or applicable data on the Loans. PASSED AND ADOPTED BY THE BOARD OF COMMISSIONERS OF THE ROCHESTER ECONOMIC DEVELOPMENT AUT12%J TY, IS 16TH DAY OF SEPTEMBER, 2013. 1� PRESIDENT OF SAID ECONOMIC DEVELO NT AUTHORITY ®� ATTEST: eloro a, Marr CITY CLERK D PUT UU Approved this Lkday of , 2013. (Seal of the City of Rochester, Minnesota) 431388v1 RC110-38 0