HomeMy WebLinkAboutResolution No. 213-07 • CITY OF ROCHESTER
COUNTY OF OLMSTED
STATE OF MINNESOTA
RESOLUTION NO. 21,5-07
RESOLUTION APPROVING DEVELOPMENT DISTRICT PROGRAM
AND TAX INCREMENT FINANCING DISTRICT PLAN
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 City establish its Development District No. 36 (the
"Development District"); adopt the Development Program for the Development District; and
establish within the Development District Tax Increment Financing District No. 36-1 (the "TIF
District") and adopt the Tax Increment Financing Plan therefor(collectively, the "Plans"); all
pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections
469.124 through 469.134 and 469.174 through 469.179; all as reflected in that certain document
entitled in part "Development District No. 36 of the City of Rochester, Minnesota," dated May 7,
2007, and presented for the Council's consideration.
• 1.02 The Council has investigated the facts relating to the Plans.
1.03 The City has performed all actions required by law to be performed prior to the
adoption and approval of the Plans, including but not limited to 30 days prior notification of the
public hearing to the County Commissioner representing the area proposed to be included in the
TIF District, a review of the Plans by the Rochester Planning and Zoning Commission, delivery
of the Plans to the County Auditor and School District Clerk at least 30 days prior to the public
hearing, and the holding of a public hearing 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 Plans and to the activities contemplated therein, including but not limited to the
Redevelopment Eligibility Report dated February 12, 2007 prepared by Armon Architecture in
Rochester, Minnesota, have heretofore been assembled or prepared by staff or others and
submitted to the Council and/or made a part of the City 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 new TIF District meets the so-called "but for" test; (2) the "reasons and
supporting facts" for the finding herein that the new TIF District satisfies the applicable criteria
for a "redevelopment" tax increment district; and (3) 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.
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• Section 2. Findings for the Adoption and Approval of the Plans.
2.01 The Council hereby finds that the TIF District is in the public interest and is a
redevelopment district, as defined in Minnesota Statutes, Section 469.174, Subdivision 10(a)(1),
because the following conditions are met and are reasonably distributed through the TIF District:
(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 similar,structures; and (2) more than 50% of the
buildings are "structurally substandard" (within the meaning of Minnesota Statutes, Section
469.174, Subdivision 10(b)) to a degree requiring substantial renovation or clearance. These
findings are based in part upon on-site examination made,written analysis and information
provided by City officials and consultants and on other reasonably available photographic and
other evidence, and the inspections and reports referenced therein substantiating the structurally
substandard nature of the building. Reference is hereby made to the Redevelopment Eligibility
Assessment for Proposed Bioscience Center and Parking Ramp dated February 12, 2007
prepared by Armon Architecture in Rochester, Minnesota, (the "Report") relating to the TIF
District and its qualification as a "redevelopment" tax increment district, including without
limitation all findings provided and all reports and documentation referenced therein.
2.02 The Common Council hereby makes the following additional findings in
connection with the Tax Increment District:
(a) The Common 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 project includes a bioscience facility and related parking facilities to be
owned by the City or the Economic Development Authority which would not be
developed by private enterprise in the reasonably foreseeable future because of
the high costs of acquisition and demolishing the existing substandard buildings
and environmental cleanup. The project has a financing gap that needs to be
funded with tax increments and other public funds.
(b) The Common Council further finds that the Tax Increment Financing 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 Tax Increment Financing Plan will generally compliment and serve to
implement policies adopted in the City's comprehensive plan. The bioscience and
parking development contemplated on the property is in accordance with the
existing zoning for the property. The existing buildings located in the Tax
Increment District are substandard, obsolete and dilapidated.
(c) The Common Council 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. The
specific basis for such finding being:
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• The proposed development to occur within the.Tax Increment Financing District
will encourage the expansion of the bioscience industry in the City and will
increase the taxable market valuation of the City.
2.03 The Council further finds that the Plans are intended and in the judgment of the
Council their effect will be to promote the public purposes and accomplish the objectives
specified in the Tax Increment Financing Plan for the TIF District and the Development Program
for Development District No. 36.
2.04 For purposes of compliance with Minnesota Statutes, Section 469.175,
Subdivision 3(2), the Council hereby finds that the increased market value of the TIF District
that could reasonably be expected to occur without the use of tax increment financing would be
less than the increase in market value estimated to result from the proposed redevelopment after
subtracting the present value of the projected tax increments for the maximum duration of the
TIF District permitted by the Tax Increment Plan, which for these purposes is an assumed period
of 26 years of full increment respecting the payable 2010 through the payable 2035 property tax
years.
In making these findings, the Council has duly noted the fact that the subject property is
in need of redevelopment and would likely remain unredeveloped if the proposed development
did not go forward, it being unlikely or at least uncertain that an alternate project would appear
for the subject site. Thus, the Council cannot reasonably assume that there would be an increase
in the market value of the site without the aid of tax increment financing and the completion of
the new development. In addition,based on current written estimates provided by and
preliminary discussions with the Olmsted County Assessor, it appears that the market value for
property tax purposes upon completion of the development would be approximately
$15,976,500; subtracting from that number$1,323,600 (the Assessor's current market value of
the property) yields a net increase in the market value of$14,652,900.
The expected tax increment is estimated to be $343,113 per year, starting in 2010, using
an assumed tax capacity rate of 1.166% on the estimated$294,238 of captured tax capacity.
Using a conservative present valuing factor of 5.00%, the present value of the maximum 26-year
stream of increments (2010 through 2035, is $4,248,768, which is substantially less than the
projected $14,652,900 net increase in market value. Thus, the development on these analyses
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.
Section 3. Approval and Adoption of the Plans.
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. City staff
shall request the Olmsted County Auditor to certify the new TIF District.
PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF
ROCHESTER,MINNESOTA, THIS 7TH DAY OF , 2007.
PRESIDENT OF SAID COMMON COUNCIL
ATTEST:
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CITY CL RK
Approved this 71h day of May, 2007.
0001,
(Seal of the City of
Rochester, Minnesota) MAYOR OF SAID CITY