HomeMy WebLinkAboutResolution No. 573-16 - EconomicDevelopDistrict#53&TIFDistrict#53-1Request.Alatus,LLCCITY OF ROCHESTER
COUNTY OF OLMSTED
STATE OF MINNESOTA
RESOLUTION NO. 16-
RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT DISTRICT AND
ECONOMIC DEVELOPMENT PLAN THEREFOR AND APPROVING A
REDEVELOPMENT 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. 53 (the "Development District"), adopt
the Economic Development Plan for the Development District (the "Development Plan"),
establish Redevelopment Tax Increment Financing District No. 53-1 (Alatus at St. Mary's
Project) within the Development District (the "TIF District") and adopt a Tax Increment
Financing Plan therefor (the "TIF Plan" and, together with the Development 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
"Economic Development Plan for Economic Development District No. 53 of the Rochester
Economic Development Authority and Tax Increment Financing Plan for DMC Redevelopment
Tax Increment Financing District No. 53-1 (Alatus at St. Mary's Project)," dated December 19,
2016, 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 Development Plan, the establishment of the TIF
District and the adoption of the TIF Plan.
1.03. The TIF District is being established to facilitate the construction of a mixed use
redevelopment project consisting of an approximately 13 story building with approximately 347
market rate rental apartments, approximately 21,242 square feet of commercial area and
approximately 560 structured parking stalls located directly west of St. Mary's Hospital at the
intersection of 2nd Street SW and 14th Ave SW in the City to be owned by the Developer (the
"Development").
1.04. Certain written reports and other documentation (collectively, the "Reports")
relating to the Plans, including the tax increment application made and other information
supplied by Alatus Rochester I, LLC, a Minnesota limited liability company (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
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proceedings on the Plans. The Reports include data, information and/or substantiation
constituting or relating to (1) why the assistance satisfies 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.
1.05. The majority of the TIF District is located within the boundaries of the
Destination Medical Center Development District as defined in Minnesota Statutes, Section
469.40, Subdivision 5, as amended (the "DMC District") as adopted in the Destination Medical
Center Development Plan as defined in Minnesota Statutes, Section 469.40, Subdivision 6, as
amended (the "DMC Development Plan") and within the Saint Mary's Place district as described
in the DMC Development Plan.
1.06. Pursuant to Resolution No. 42-2016 of the Destination Medical Center
Corporation ("DMCC"), the DMCC authorized the submission of a proposed modification to the
DMC Development District to include the Development in the DMC Development District (the
"DMC Development District Modification"). The DMCC intends to schedule a public hearing
on the proposed DMC Development District Modification, pursuant to statute, and take action on
the proposed DMC Development District Modification at its meeting on January 26, 2017.
1.07. Subject to approval of the DMC Development District Modification by the
DMCC, the EDA or the City 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 thereon by the
City following notice thereof published in the City's official newspaper at least 10 but not more
than 30 days prior to the public hearing.
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 in the City and the Development Plan will afford maximum opportunity, consistent
with the needs of the City as a whole, for the development of the Development District by
private enterprise.
2.02. The Council hereby finds that, subject to approval of the DMC Development
District Modification by the DMCC, the TIF District is in the public interest and is a
"redevelopment tax increment financing district within the area of the destination medical center
development district to fund public infrastructure projects" within the meaning of Minnesota
Statutes, Section 469.45, Subd. 4. Pursuant to the DMC Act, the EDA may establish a
redevelopment tax increment financing district within the DMC District without meeting the
requirements for redevelopment districts created pursuant to the general TIF Act, specifically,
Minnesota Statutes, Sections 469.174, subdivision 10.
2.03. 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 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 redevelopment costs
are higher than for new development. The Developer has represented that
it could not proceed with the Development 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 complement and serve to implement policies
adopted in the City's comprehensive plan. The mixed -use commercial,
retail and rental housing uses contemplated on the property are in
accordance with the existing or approved incentive zoning for the
property. The Development is consistent with the DMC Development
Plan.
(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 Development proposed to occur within the TIF District to be
completed, owned and operated by the Developer 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 housing and
commercial 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
site that could reasonably be expected to occur without the use of tax increment financing
is approximately $0, which is less than $52,272,201 which is the increase in the market
value estimated to result from the proposed development (approximately $66,764,106,
assuming no annual inflation) after subtracting the present value of the projected tax
increments for the maximum duration of the TIF District (approximately $14,491,905).
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.
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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. The City also intends that the EDA shall have and enjoy, with respect to the DMC
Development District, the full range of powers and duties conferred upon the EDA pursuant to
the Development Plan, the TIF Act, the DMC Act and such other legal authority as the EDA may
have or enjoy from time to time.
2.07. Subject to approval of the DMC Development District Modification by the
DMCC, the Development District and the TIF District are hereby established and 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 and approval of the
DMC Development District Modification by the DMCC, 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.
2.08. The Council finds that the Development is a public infrastructure project within
the meaning of Minnesota Statutes, Section 469.40, subdivision 11, which provides for:
acquiring real property and other assets associated with the real property; demolishing, repairing
or rehabilitating buildings; installing, constructing or reconstructing elements of public
infrastructure required to support the overall development of the DMC Development District;
acquiring, constructing or reconstructing, or equipping parking facilities and other facilities to
encourage intermodal transportation and public transit; making related site improvements; and
preparing land for private development; and that the City approves the Development as
consistent with the DMC Development Plan.
Section 3. Policy on Interfund Loans and Advances.
3.01. 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 in an amount up to $1,455,961, interest in an
amount up to $9,800,000 and other project costs in an amount up to $17,863,259) 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 $29,119,220 outstanding at any time.
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(d) All Loans shall mature not later than February 1, 2045 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 revenue 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 19TH DAY OF DECEMBER, 2016.
PRESIDENT OF SAID COMMON COUNCIL
ATTEST:
CITY CLERK
Approved this day of December, 2016.
MAYOR OF SAID CITY
(Seal of the City of
Rochester, Minnesota)
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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 December 19, 2016, 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. 53 and Redevelopment Tax Increment Financing District No. 53-1
therein.
WITNESS My hand this day of December, 2016.
City Clerk
Rochester, Minnesota
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