HomeMy WebLinkAboutResolution No. 329-17 - EstablishDevelopDistrict#60&TaxIncementFinanceDistrict#61-1.ResidenceDiscoverySquare,LLC
CITY OF ROCHESTER
COUNTY OF OLMSTED
STATE OF MINNESOTA
RESOLUTION NO. 17-______
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. 61 (the “Development District”), adopt
the Economic Development Plan for the Development District (the “Development Plan”),
establish Redevelopment Tax Increment Financing District No. 61-1 (Residence at Discovery
Square 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. 61 of the Rochester
Economic Development Authority and Tax Increment Financing Plan for DMC Redevelopment
Tax Increment Financing District No. 61-1 (Residence at Discovery Square Project),” dated July
17, 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 TIF District is being established to facilitate demolition of existing buildings
and construction of a mixed use redevelopment project consisting of an approximately 6-story
building with street level commercial space and approximately 143 residential rental units, with
underground parking, to be located on a significant portion of the block bounded by 3rd and 4th
Avenues between 5th and 6th Streets 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 Residence at Discovery Square, 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
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files and 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 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 Discovery Square district as described in the DMC
Development Plan.
1.06. 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 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:
(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.
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(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 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 $15,596,554 which is the increase in the market
value estimated to result from the proposed development (approximately $20,213,300,
assuming no annual inflation) after subtracting the present value of the projected tax
increments for the maximum duration of the TIF District (approximately $4,616,746).
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. 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. 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
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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.
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 $909,542, interest in an amount
up to $725,000 and other project costs in an amount up to $7,460,879) 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 $9,095,421 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
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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 17TH 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)
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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 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 EDA’s Economic Development
District No. 61 and Redevelopment Tax Increment Financing District No. 61-1 therein.
WITNESS My hand this ____ day of July, 2017.
_______________________________________
City Clerk
Rochester, Minnesota
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