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HomeMy WebLinkAboutResolution No. 247-15 - TIF Plan #47-1.Pepsi-Cola Bottling CompanyCITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION NO. RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT DISTRICT AND ECONOMIC DEVELOPMENT 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 Economic Development District No. 47 (the "Development District"), adopt the Economic Development Plan for the Development District (the "Economic Development Plan"), establish Tax Increment Financing District No. 47-1 within the Development District (the "TIF District") and adopt a Tax Increment Financing Plan therefor (the "TIF Plan" and, together with the Economic Development Plan, the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 through 469.1082, Sections 469.174 through 469.1794 (the "TIF Act"), as amended (collectively, the "Act"); all as reflected in that certain document entitled in part "Economic Development Plan for Economic Development District No. 47 of the Rochester Economic Development Authority and Tax Increment Financing Plan for Tax Increment Financing District No. 47-1 (Pepsi -Cola Bottling Project)," dated May 18, 2015, 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 Economic Development Plan, the establishment of the TIF District and the adoption of the TIF Plan. 1.03. The City or 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 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 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 Pepsi -Cola Bottling Company of Rochester, Minnesota, a Minnesota corporation (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 Plan. The Reports include information constituting or relating to the bases for the other findings and determinations made in this resolution. The Council hereby 460721v1 RC110-50 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 the Development District is proper and desirable to establish and develop within the City, its effect will be to carry out the objectives of the Economic Development Plan by creating an impetus for the development of a warehouse and distribution facility and related structures in the City, and otherwise promote certain public purposes and accomplish certain objectives as specified in the Plans. 2.02. The Council hereby finds that the TIF District is in the public interest and is an "economic development district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 12, because it will discourage commerce and industry from moving their operations to another state or municipality and it will result in capital investment in the City and therefore preservation and enhancement of the tax base in the state. 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 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 development will occur would not be developed in the reasonably foreseeable future. The Developer has represented that it could not proceed with the proposed construction of an approximately 97,000 square foot building for use as a distribution facility plus spaces for directly related activities, including a vending workshop, offices and meeting spaces, together with all related improvements to be completed, owned and operated by the Developer in the TIF District (the "Development") without tax increment assistance due to the high cost of land in the City. (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 warehouse and distribution 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: 2 460721v1 RC110-50 The proposed Development to occur within the TIF District is the construction by the Developer of a warehouse and distribution facility. The proposed facility will be used for distribution of goods and related activities and 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, and the available distribution facilities in the City. (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 property to be developed within the TIF District that could reasonably be expected to occur without the use of tax increment financing is probably $0, which is less than the increased market value estimated to result from the proposed development (i.e., approximately $5,858,800) after subtracting the present value of the projected tax increments for the maximum duration of the TIF District (i.e., approximately $1,184,247) which is approximately $4,674,553. 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. 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. Section 3. Approval and Adoption of the Plans; Policy on Interfund Loans and Advnnrec 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 Developer has presented the Council and the EDA with a proposal for the construction of the Development by the Developer, and there has been prepared and presented to the Board for its consideration a certain Development Assistance Agreement (the "Agreement") between the EDA and the Developer, stating the Developer's responsibilities and the terms and conditions the EDA's assistance with the financing of certain costs of the Development. The Agreement, 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 the EDA is authorized to executed such Agreement. 3 460721v1 RC110-50 3.03. 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. (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, 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 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 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 18TH DAY OF MAY, 2015. PRESIDENT OF SAID COMMON COUNCIL ATTEST: CITY CLERK Approved this day of May, 2015. MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 0 460721v1 RC110-50 Councilmember moved the adoption of the foregoing resolution, which motion was duly seconded by Councilmember , and upon vote being taken thereon, the following Councilmembers voted in favor thereof: and the following Councilmembers voted against the same: whereupon said resolution was declared duly passed on adopted. 5 460721v1 RC110-50 CITY CLERK'S CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Rochester, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a duly called and regularly held meeting of the Common Council of said City held on May 18, 2015, with the original minutes thereof on file in my office and I further certify that the same is a full, true, and correct transcript thereof insofar as said minutes relate to the actions referenced therein with respect to the EDA's Economic Development District No. 47 and Tax Increment Financing District No. 47-1 therein. WITNESS My hand this day of May, 2015. City Clerk Rochester, Minnesota 6 460721v1 RC110-50