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HomeMy WebLinkAboutResolution No. 328-17 - EstablishDevelopDistrict#60&TIFPlan#60-1.EastgateApartments RESOLUTION NO. ______ CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT DISTRICT AND ECONOMIC DEVELOPMENT PLAN THEREFOR AND APPROVING A HOUSING 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. 60 (the Development District), adopt the Economic Development Plan for the Development District Development Plan, establish Housing Tax Increment Financing District No. 60-1 (Eastgate Apartments Project) within the Development District TIF and adopt a Tax Increment Financing Plan therefor (the TIF Plan and, together with the Development Plan), 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 , as amended ; all as reflected in that certain document entitled in part Economic Development Plan for Economic Development District No. 60 of the Rochester Economic Development Authority and Tax Increment Financing Plan for Housing Tax Increment Financing District No. 60-1 (Eastgate Apartments Project), dated July 17, 2017, and presented for the Councils 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 Citys 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 BDKN LLLP, a limited liability limited partnership or an affiliate thereof (the 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 Plans. The Reports include information constituting or relating to 499707v2 RC110-87 (1) why the assistance satisfies the so- 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 construction of an approximately four-story building containing approximately 135-units of affordable housing, with surface and underground parking and related improvements, to be located at 1201 Eastgate Drive SE in the City to be completed, owned and operated by the Developer (the 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 Development Plan by creating an impetus for the development of low and moderate income housing facilities 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 a housing Section 469.174, Subdivision 11, because: The TIF District consists of a project or portions of a project intended for occupancy, in part, by persons or families of low and moderate income as defined in Chapter 462A, Title II of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, and any other similar present or future federal, state or municipal legislation, or the regulations promulgated under any of those acts. The Developer has represented that at least 40% of the units in the Development will be reserved for rental to persons whose annual income does not exceed 60% of applicable area median income. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 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 foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being: The Development will result in the construction of low and moderate income housing units which would not otherwise be constructed in the reasonably foreseeable future. The rents for affordable housing projects do not provide a sufficient return on investment to stimulate new 2 499707v2 RC110-87 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 Citys comprehensive plan. The housing Development contemplated on the property is in accordance with the existing or approved incentive 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 and the Development District by private enterprise. The specific basis for such finding being: The Development proposed to occur within the TIF District is the construction by private enterprise of primarily low and moderate income multi-family workforce housing. The development will increase the taxable market valuation of the City. The available multi-family workforce housing in the City will expand by approximately 135 rental units with the completion of the Development and help fulfill the need for such housing in the City. 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. 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 and Advances. 3.01. The Council hereby approves a policy on interfund loans or advances (Loans) for the TIF District, as follows: 3 499707v2 RC110-87 (a) The authorized tax increment eligible costs (including without limitation out-of-pocket administrative expenses in an amount up to $171,810, interest in an amount up to $250,000 and other project costs in an amount up to $1,296,299) 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 Citys 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 $1,718,109 outstanding at any time. (d) All Loans shall mature not later than February 1, 2046 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 Citys 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 TH ROCHESTER, MINNESOTA, THIS 17 DAY OF JULY, 2017. _______________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: _________________________ CITY CLERK Approved this ____ day of July, 2017. _______________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 4 499707v2 RC110-87 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 499707v2 RC110-87 CITY CLERKS 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 17, 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 s Economic Development District No. 60 and Tax Increment Financing District No. 60-1 therein. WITNESS My hand this ____ day of July, 2017. _______________________________________ City Clerk Rochester, Minnesota 6 499707v2 RC110-87