HomeMy WebLinkAboutResolution No. 311-17 - RiverwalkRochester, LLC.DevelopDistrict#59&TaxIncrement#59-1
RESOLUTION NO. 17-______
CITY OF ROCHESTER
COUNTY OF OLMSTED
STATE OF MINNESOTA
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. 59 (the “Development District”), adopt
the Economic Development Plan for the Development District (the “Development Plan”),
establish Redevelopment Tax Increment Financing District No. 59-1 (Riverwalk Apartments
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, and Sections 469.174 through
469.1794 (the “TIF 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.
59 of the Rochester Economic Development Authority and Tax Increment Financing Plan for
Redevelopment Tax Increment Financing District No. 59-1,” dated July 5, 2017, 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 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
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.
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 Riverwalk Apartments L.L.C., a Minnesota limited liability company (the
“Developer”) as to the activities contemplated therein and the Blight Assessment for Riverwalk
Apartment Project dated April 10, 2017, prepared by TSP, Inc., in Rochester, Minnesota, (the
“Redevelopment TIF Assessment”) have heretofore been assembled or prepared by staff or
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others and submitted to the Council and/or made a part of the City and EDA 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 TIF District meets the
requirements to be a redevelopment tax increment financing district, (2) why the assistance
satisfies the so-called “but for” test 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.
1.05. The TIF District is being established to facilitate the demolition of existing
buildings and construction of an approximately 152-unit apartment building with underground
parking to be owned and operated by the Developer (the “Development”).
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 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, Subd. 10(b)), to a degree requiring substantial
renovation or clearance. The TIF District consists of four parcels which are “occupied” as
defined in Minnesota Statutes, Section 469.174, Subd. 10(a)(1) in that at least 15% of the area of
each parcel is occupied by buildings, streets, utilities, paved or gravel parking lots, or other
similar structures. Based on the Redevelopment TIF Assessment, the four buildings in the TIF
District (100%), which is more than 50% of the buildings within the TIF District, are found to be
structurally substandard, are not in compliance with applicable building codes, and none of the
buildings could be brought into such compliance at a cost of less than 15% of the cost of
constructing new structures of the same size and type on the subject sites. These findings are
based in part upon on-site examination and written reports substantiating the structurally
substandard nature of the buildings. The reasons and supporting facts for the determination that
the TIF District is a redevelopment district under the statute are set forth in the Redevelopment
TIF Assessment, which is incorporated herein by reference, and a copy of which is on file with
the City Administrator.
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 Council, would not occur solely through private investment within the reasonably
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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 demolition and
redevelopment costs are higher than for new development and the costs of
structured parking necessary to enable higher density housing are higher
than for surface parking typically used in the private developments in this
area of the City. 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 rental housing facility
contemplated on the property is in accordance with the existing zoning or
approved amendments 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 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 parcel
consistent with the needs of the City. The Development will increase the
taxable market valuation of the City and the available housing 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 $14,744,233 which is the increase in the market
value estimated to result from the proposed development (approximately $18,561,300,
assuming no annual inflation) after subtracting the present value of the projected tax
increments for the maximum duration of TIF District No. 59-1 (approximately
$3,817,067). 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 and the Development District.
2.05. The provisions of this Section 2 are hereby incorporated by reference into and
made a part of the TIF Plan.
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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.
2.07. 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,
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.
Section 3. Interfund Loans.
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 $375,999, interest in an amount
up to $1,129,023 and other project costs in an amount up to $6,014,949) 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 $7,519,971 outstanding at any time.
(d) All Loans shall mature not later than February 1, 2047 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.
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PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF
ROCHESTER, MINNESOTA, THIS 5TH DAY OF JULY, 2017.
_______________________________________
PRESIDENT OF SAID COMMON COUNCIL
ATTEST:
_________________________
CITY CLERK
Approved this 5th day of July, 2017.
_______________________________________
MAYOR OF SAID CITY
(Seal of the City of
Rochester, Minnesota)
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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.
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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 July 5, 2017, 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. 59 and Redevelopment Tax Increment Financing District No. 59-1 therein.
WITNESS My hand this ____ day of July, 2017.
_______________________________________
City Clerk
Rochester, Minnesota
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