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HomeMy WebLinkAbout2011 03-28 CCP Regular Session Public Copy • AGENDA CITY COUNCIL STUDY SESSION March 28, 2011 6:00 p.m. City Council Chambers A copy of the full City Council packet is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 1. City Council Discussion of Agenda Items and Questions 2. Miscellaneous 3. Discussion of Work Session Agenda Items as Time Permits 4. Adjourn • • CITY COUNCIL MEETING • City of Brooklyn Center March 28, 2011 AGENDA 1. Informal Open Forum with City Council — 6:45 p.m. — provides an opportunity for the public to address the Council on items which are not on the agenda. Open Forum will be limited to 15 minutes, it is not televised, and it may not be used to make personal attacks, to air personality grievances, to make political endorsements, or for political campaign purposes. Council Members will not enter into a dialogue with citizens. Questions from the Council will be for clarification only. Open Forum will not be used as a time for problem solving or reacting to the comments made but, rather, for hearing the citizen for informational purposes only. 2. Invocation - 7 p.m. 3. Call to Order Regular Business Meeting —The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City Council packet is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 4. Roll Call 5. Pledge of Allegiance • 6. Approval of Agenda and Consent Agenda —The following items are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a Councilmember so requests, in which event the item will be removed from the consent agenda and considered at the end of Council Consideration Items. a. Approval of Minutes 1. March 14, 2011 — Study Session 2. March 14, 2011 — Regular Session b. Licenses 7. Presentations/ Proclamations /Recognitions/Donations None. 8. Public Hearings a. Continued Special Assessments for Weed Removal Costs, Nuisance Abatement Costs, and Administrative Fines /Citation Costs I. Resolution Certifying Special Assessments for Weed Removal Costs to the Hennepin County Tax Rolls • CITY COUNCIL AGENDA -2- March 28, 2011 • 2. Resolution Certifying Special Assessments for Nuisance Abatement Costs to the Hennepin County Tax Rolls 3. Resolution Certifying Special Assessments for Administrative Fines /Citation Costs to the Hennepin County Tax Rolls —This item was first read on February 14, 2011; published in the official newspaper on February 24, 2011; offered for Public Hearing on March 14, 2011, at which time the above referenced items were continued. Requested Council Action: — Motion to continue Public Hearing. - Motion to take public input. — Motion to close Public Hearing. Motion to adopt resolutions. b. Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Establishing Tax Increment Financing District No. 5 Therein and Approving a Tax Increment Financing Plan Therefor 1. Resolution Approving a Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Establishing Tax Increment Financing District No. 5 Therein and Approving a Tax Increment Financing Plan Therefor —This item was first read on February 14, 2011; published in the official • newspaper on February 24, 2011; and is offered this evening for Public Hearing. Requested Council Action: — Motion to open Public Hearing. — Motion to take public input. — Motion to close Public Hearing. —Motion to adopt resolution. 9. Planning Commission Items a. Planning Commission Application No. 2011 -006 Submitted by Todd Shaw for Precision Machine, Inc. Request for PUD Amendment Approval to Rezone 1700 Freeway Boulevard from I -1 (Industrial) to PUD /I -1 (Planned Unit Development/Industrial) to Facilitate an Expansion of the Parking Lot and Repurposing of this Industrial Building from Warehousing to Manufacturing. The Planning Commission recommended approval of this application at its March 17, 2011, meeting. .1. Resolution Regarding Disposition of Planning Commission Application No. 2011 -006 Submitted by Todd Shaw for Precision Machine, Inc. (1700 Freeway Boulevard) Requested Council Action: — Motion to adopt resolution. CITY COUNCIL AGENDA -3- March 28, 2011 10. Council Consideration Items • None. 11. Council Report 12. Adjournment Agenda Items Tabled or Continued An Ordinance Amending Chapter 4 of the Brooklyn Center City Charter, Sections 4.01 and 4.02 —This item was first read on April 12, 2010; was published in the official newspaper on April 22, 2010; and the Public Hearing was continued at the May 10, 2010, meeting until such time as the Charter Commission makes its recommendation to the City Council. Resolution Establishing Fees for Community Garden Plots Regulated by the City of Brooklyn Center —This item was tabled at the May 10, 2010, meeting. • EDA MEETING City of Brooklyn Center March 28, 2011 AGENDA 1. Call to Order —The EDA requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City Council packet, including EDA (Economic Development Authority), is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 2. Roll Call 3. Approval of Agenda and Consent Agenda —The following items are considered to be routine by the Economic Development Authority (EDA) and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes 1. March 14, 2011 — Regular Session . 4. Commission Consideration Items a. Resolution Opting Not to Waive Limited Tort Liability for 2011 Requested Commission Action: - Motion to adopt resolution. b. Resolution Approving a Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Establishing Tax Increment Financing District No. 5 Therein and Approving a Tax Increment Financing Plan Therefor Requested Commission Action: — Motion to adopt resolution. 5. Adjournment AGENDA CITY COUNCIL /ECONOMIC DEVELOPMENT AUTHORITY WORK SESSION March 28, 2011 Immediately Following Regular City Council and EDA Meetings Which Start at 7:00 P.M. Council Chambers City Hall A copy of the full City Council packet is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. ACTIVE DISCUSSION ITEMS 1. West Palmer Lake Park Building 2. Review of TIF 5 Development Agreement PENDING LIST FOR FUTURE WORK SESSIONS Later /Ongoing 1. Progress Reports on Achievement of Strategic Goals 2. School District Discussions/BC Strategic Plan Report 3. All City Open House 4. Sister City Update 5. Neighborhood Designations 6. Department Year End Reports • 7. Active Living Program 8. Graduated Sanitary Utility Rate Study 9. Garbage Hauler Organized Collection Update 10. Joint Meeting with Commissions April 6th Follow -up 11. Shingle Creek Crossing 12. Financial Commission Report 13. Youth Participation Request 14. Budget Reductions to Lower City's Reliance on State LGA 15. Highway 252 Update — June 2011 City Council'Agenda Item No. 6a • • MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL • OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY SESSION MARCH 14, 2011 CITY HALL — COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Study Session called to order by Mayor Tim Willson at 6:08 p.m. ROLL CALL Mayor Tim Willson and Councilmembers Carol Kleven and Tim Roche. Absent and excused were Councilmembers Kay Lasman and Dan Ryan. Also present were City Manager Curt Boganey, Public Works Director /City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, and Carla Wirth, Timesaver Off Site Secretarial, Inc. CITY COUNCIL DISCUSSION OF AGENDA ITEMS AND QUESTIONS • City Manager Curt Boganey noted the Council had received updated information for Item No. 8a, Proposed Special Assessments for Diseased Tree Removal Costs, Delinquent Weed Removal Costs, Delinquent Nuisance Abatement Costs, Delinquent Administrative Fines /Citations, and Administrative Vacant Building Registrations, that changed the date for assessment certification for weed removal from April 14, 2011, to April 1, 2011. In addition, several property owners have paid their assessment so those amounts have been removed from the assessment roll. Mr. Boganey referenced the second page to the cover memorandum describing the procedure to be followed and indicated these corrections have also been made to the public meeting packet. Councilmember Roche requested discussion on Item 9b, Planning Commission Application No. 2011 -003, Submitted by Loren Van Der Slik, Planned Unit Development Amendment to the Brookdale C- 2/PUD, the Redevelopment of this Regional Shopping Mall to a 65 Acre Town Center Commercial Development to be known as Shingle Creek Crossing. He requested staff comment specific to the daylighting of Shingle Creek. Mr. Boganey advised it will not be known whether daylighting is feasible until the County provides that information and financial implications can be discussed with the developer. He stated that information will be known prior to consideration in April. Councilmember Roche stated his support for daylighting of Shingle Creek, noting its aesthetic value. Director of Business and Development Gary Eitel provided the Council with a copy of the February 17, March 1, and March 14, 2011, letters received from Hinshaw & Culbertson LLP (Sears). Mr. Boganey advised that Hinshaw has received all of the requested information. • 03/14/11 -1- DRAFT Mr. Eitel stated he expects to receive a report on the Hennepin County study regarding daylighting of Shingle Creek the first part of April. • Councilmember Roche indicated the blueprints look great and thanked staff for their work on that effort. He asked whether the Applebee's parking area will be completed during Phase L Mr. Eitel confirmed that parking area will be completed with the intersection as part of Phase I. MISCELLANEOUS Councilmember Kleven described the recent updating at Panera Restaurant. ADJOURNMENT Councilmember Roche moved and Councilmember Kleven seconded to close the Study Session at 6:26 p.m. Motion passed unanimously. • • 03/14/11 -2- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY. COUNCIL • OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION MARCH 14, 2011 CITY HALL — COUNCIL CHAMBERS 1. INFORMAL OPEN FORUM WITH CITY COUNCIL CALL TO ORDER INFORMAL OPEN FORUM The Brooklyn Center City Council met in Informal Open Forum called to order by Mayor Tim Willson at 6:46 p.m. ROLL CALL Mayor Tim Willson and Councilmembers Carol Kleven and Tim Roche. Absent and excused were Councilmembers Kay Lasman and Dan Ryan. Also present were City Manager Curt Boganey, Public Works Director /City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Assistant City Manager /Director of Building and Community Standards Vickie Schleuning, Fire Chief Lee Gatlin, Housing and Community Standards Supervisor Jesse Anderson, City Attorney Charlie LeFevere, and Carla Wirth, TimeSaver Off • Site Secretarial, Inc. Mayor Tim Willson opened the meeting for the purpose of Informal Open Forum. No one wished to address the City Council. Councilmember Roche moved and Councilmember Kleven seconded to close the Informal Open Forum at 6:48 p.m. Motion passed unanimously. 2. INVOCATION Councilmember Lasman, in her absence, had requested a moment of silence and personal reflection on those impacted by the recent tsunami in Japan and potential damage to its nuclear power stations. 3. CALL TO ORDER REGULAR BUSINESS MEETING The Brooklyn Center City Council met in Regular Session called to order by Mayor Tim Willson at 7:00 p.m. • 03/14/11 -1- DRAFT 4. ROLL CALL Mayor Tim Willson and Councilmembers Carol Kleven and Tim Roche. Absent and excused were Councilmembers Kay Lasman and Dan Ryan. Also present were City Manager Curt Boganey, Public Works Director /City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, Fire Chief Lee Gatlin, City Attorney Charlie LeFevere, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. 5. PLEDGE OF ALLEGIANCE Mayor Willson welcomed Boy Scout Troop #533 of Crystal, Minnesota, who led the recitation of the Pledge of Allegiance. 6. .APPROVAL OF AGENDA AND CONSENT AGENDA Councilmember Roche moved and Councilmember Kleven seconded to approve the Agenda and Consent Agenda, and the following consent items were approved: 6a. APPROVAL OF MINUTES 1. February 28, 2011— Study Session 2. February 28, 2011 — Regular Session 3. February 28, 2011— Work Session 6b. LICENSES • MECHANICAL Air Mechanical 16411 Aberdeen Street NE, Ham Lake Auto Garage Door & Fireplace 8900 109 Avenue N., Champlin B & D Plumbing, Heating & A/C 4145 MacKenzie Court, St. Michael Corporate Mechanical 5114 Hillsboro Avenue N., New Hope Corval Constructors, Inc. 1633 Eustis Street, St. Paul D J's Heating & A/C 6060 LaBeaux Avenue NE, Albertville Do Pham, Inc. 10709 Foley Boulevard, Coon Rapids Fireside Hearth & Home 2700 Fairview Avenue N. Roseville Genz Ryan Plumbing & Heating Company 2200 West Hi�hway 13, Burnsville Gilbert Mechanical 4451 West 76 Street, Edina Golden Valley Heating 5182 West Broadway, Crystal Harris Companies 909 Montreal Circle, St. Paul Heating Guy, LLC 3004 Ottawa Street, So. St. Paul Hoffman Refrigeration & Heating 5660 Memorial Avenue N. Stillwater Home Energy Center 2415 Annapolis Lane N., Plymouth Metro Heating and Cooling 255 Roselawn Avenue E., St. Paul Horwitz, Inc. 4401 Quebec Avenue N., New Hope Kath Fuel Oil Service dba Kath HVAC 3096 Rice Street, Little Canada Kramer Mechanical Plumbing & Heating 7860 Fawn Lake Drive NE, Stacy • 03/14/11 -2- DRAFT Master Mechanical 1027 Gemini Road, Eagan . McDowall Company P.O. Box 606, Waite Park Metropolitan Mechanical Contractors 7450 Flying Cloud Drive, Eden Prairie Midwest Heating & A/C 26355 Tucker Road, Rogers Minnesota Petroleum Service 682 39 Avenue NE, Minneapolis Pierce Refrigeration 19202 d Avenue S., Anoka Practical Systems 4342B Shady Oak Road, Hopkins Precision Heating & Cooling 3650 Chestnut Street, Chaska Riccar Heating & A/C 2387 Station Parkway NW, Andover Ron's Mechanical 12010 Old Brick Yard Road, Shakopee Royalton Heating & A/C 4120 85 Avenue N., Brooklyn Park Schadegg Mechanical, Inc. 225 Bridgeport Drive, So. St. Paul Solid Refrigeration LLC 1125 American Boulevard, Bloomington Southside Heating & A/C 10800 Normandale Blvd., Bloomington Southtown Refrigeration 6325 Sandburg Road, Golden Valley Standard Heating & A/C 130 Plymouth Avenue, Minneapolis St. Cloud Refrigeration 604 Lincoln Avenue NE, St. Cloud Total Comfort 4000 Winnetka Avenue N., New Hope RENTAL INITIAL (TYPE II —two-year license) 3225 64 th Avenue N. Ron Huckabee 4909 68 Avenue N. Donald Yeager • 6119 Beard Avenue N. Konrad Wagner 6809 Fremont Place N. Ali Sajjad 5713 Humboldt Avenue N. 'Janice Biorn INITIAL (TYPE III — one-year license) 6830 Scott Avenue N. Chou Thao RENEWAL (TYPE I — three-year license) Maranatha Place 5415 69 Avenue N. Center Park Senior Apartments 6109 -11 -13 Beard Avenue N. James & Bobbie Simons 3313 63 Avenue N. Yuan Xiong Passed with Weather Deferral 6124 Emerson Avenue N. - Nicholas Lewis Passed with Weather Deferral 6401 Emerson Avenue N. Jennifer & Leif Ronken 2741 Freeway Boulevard Motel 6, 1460 5315 Fremont Avenue N. David Barnhart 6007 Girard Avenue N. Ben Dossman IV Passed with Weather Deferral 7211 Girard Avenue N. Tommy Vang Passed with Weather Deferral • 3318 Mumford Road Beng Thao 03/14/11 -3- DRAFT 5344 Twin Lakes Boulevard. E. Takasi Sibuya 3806 Urban Avenue Greg Gervils • 4318 Winchester Lane Deepak Nath RENEWAL (TYPE II — two-year license) 5548 Girard Avenue N. Berisso Bekuto 5636 Humboldt Avenue N. Gao Qiang Liu Passed with Weather Deferral 6436 Indiana Avenue N. Harry Narine Passed with Weather Deferral RENEWAL (TYPE III — one-year license) 6037 Ewing Avenue N. Thor Yang SIGNHANGER Albrecht Sign 7775 Main Street NE, Fridley Install This Awning & Sign 4835 Lyndale Avenue N., Minneapolis Topline Advertising 17755 Justen Circle, Maple Grove 6c. APPROVAL OF LETTER OF SUPPORT FOR GRANT TO PURCHASE THERMAL IMAGING CAMERA(S) 6d. APPROVAL OF SITE PERFORMANCE GUARANTEE REDUCTION FOR 2850 NORTHWAY DRIVE (GATEWAY COMMONS . APARTMENTS) Motion passed unanimously. 7. PRESENTATIONS! PROCLAMATIONS /RECOGNITIONS/DONATIONS None. . 8. PUBLIC HEARINGS 8a. PROPOSED SPECIAL ASSESSMENTS FOR DISEASED TREE REMOVAL COSTS, DELINQUENT WEED REMOVAL COSTS, DELINQUENT NUISANCE ABATEMENT COSTS, DELINQUENT ADMINISTRATIVE FINES/ CITATIONS, AND ADMINISTRATIVE VACANT BUILDING REGISTRATIONS Assistant City Manager/Director of Building and Community Standards Vickie Schleuning explained that Public Hearings will be held tonight on five proposed assessments for diseased tree removal costs, delinquent weed removal costs, delinquent nuisance abatement costs, delinquent administrative fines /citations, and administrative vacant building registrations. She advised that since the publication of the Public Hearing notice, some assessments have been paid and removed from those pending levy lists. Ms. Schleuning advised staff has not received any written appeals to assessments and recommend, if appeals are presented during the public • 03/14/11 -4- DRAFT hearing, that those assessments be removed from the certification list for additional staff research • and the remaining assessments be certified. Councilmember Kleven moved and Councilmember Roche seconded to open the Public Hearing. Motion passed unanimously. Dawn Gieseke, 5607 Aldrich Avenue N., explained she inherited this 1950s house from her father and had repainted the garage door and removed the blocks from the camper and put on collector license plates. She is currently working with HUD to abate lead and asbestos. Ms. Gieseke reviewed the letters she had sent to and received from staff requesting additional, time to gain compliance because the weather was too hot to paint the garage. Staff granted an extension to September 13, 2010, and the work was completed by that date. She stated she does not have $125 to pay the fine and would like to appeal the assessment. City Manager Curt Boganey explained this assessment is an administrative fine and would recover the City's cost. Mayor Willson explained the process for residents to appeal the assessment and that mitigating circumstances would have to be found for the Council to consider an abatement. Douglas Wahl, 6469 Magna Drive, regarding 4806 Twin Lake Avenue, stated he grew up in Brooklyn Center and was now investing in it with rental units. He explained he was unaware of • the City's recently adopted rental ordinances or the special assessment for $120. Mr. Wahl stated he has been working with City staff on a work plan and his three properties were now in compliance. He believed that proper notice was not given because it was sent to his business and not the property management company. Mr. Wahl stated he has a letter from the management company indicating they were not notified and intends to appeal the assessment. Teizu Jones, 5800 Ewing Avenue N, stated she purchased this property in November 15, 2010, and the assessment occurred, prior to her ownership. She stated the settlement agency had verified prior to closing that all assessments were current. Mayor Willson stated this assessment should have been found during the title search and, at this point, the City has incurred the expense. He noted Ms. Jones may have recourse with the vendor who conducted the title search. Ms. Jones stated she would like to appeal the assessment. Edward Doll, 1201 57 Avenue N., stated his property was being assessed for $100 for cutting the grass. He explained that he watches his lawn to assure it is cut but a few weeds grew too tall within a few days on the corner of the lot that were in violation. Mr. Doll stated he would like to appeal the assessment and request it be dismissed and have staff check it. Sylvester Seward, 5012 Lilac Drive N., stated his property was being assessed for $125 but he did not receive any communication and was surprised to learn this fine was pending. Mr. Seward stated he would appeal the assessment so he can clarify the record. • 03/14/11 -5- DRAFT Rose Mary Dominguez, 5931 Vincent Avenue N., stated a letter was placed on her door because of some pieces of wood that were in the yard. She explained why she was selling her house and • economic difficulties she was facing. Ms. Dominguez stated she has a special needs child and was not able to pay the assessment so she would prefer to have it taken off the purchase of her house. She indicated she would like to appeal the assessment. Councilmember Roche moved and Councilmember Kleven seconded to close the Public Hearing. Motion passed unanimously. City Attorney Charlie LeFevere recommended the Council continue appealed special assessments for staff research and compilation of a report. Mr. Boganey stated a report will be provided on issues raised related to the citation, the basis of the charges, and notice provided. This report would be considered at the March 28, 2011, Council meeting. 1. RESOLUTION NO. 2011 -42 CERTIFYING SPECIAL ASSESSMENTS FOR DISEASED TREE REMOVAL COSTS TO THE HENNEPIN COUNTY TAX ROLLS Councilmember Roche moved and Councilmember Kleven seconded to approve RESOLUTION NO. 2011 -42 Certifying Special Assessments for Diseased Tree Removal Costs to the Hennepin County Tax Rolls. Motion assed unanimously. • p 2. RESOLUTION NO. 2011 -43 CERTIFYING SPECIAL ASSESSMENTS FOR WEED REMOVAL COSTS TO THE HENNEPIN COUNTY TAX ROLLS Councilmember Roche moved and Councilmember Kleven seconded to approve RESOLUTION NO. 2011 -43 Certifying Special Assessments for Weed Removal Costs to the Hennepin County Tax Rolls, and continuing the following assessments to March 28,2011: 5800 Ewing Avenue N. and 1201 57 Avenue N. Motion passed unanimously. 3. RESOLUTION NO. 2011 -44 CERTIFYING SPECIAL ASSESSMENTS FOR NUISANCE ABATEMENT COSTS TO THE HENNEPIN COUNTY TAX ROLLS Councilmember Roche moved and Councilmember Kleven seconded to approve RESOLUTION NO. 2011 -44 Certifying Special Assessments for Nuisance Abatement Costs to the Hennepin County Tax Rolls, and continuing the following assessments to March 28, 2011: 5931 Vincent Avenue N. • 03/14/11 -6- DRAFT Motion passed unanimously. • 4. RESOLUTION NO. 2011 -45 CERTIFYING SPECIAL ASSESSMENTS FOR ADMINISTRATIVE FINE /CITATION COSTS TO THE HENNEPIN COUNTY TAX ROLLS Councilmember Roche moved and Councilmember Kleven seconded to approve RESOLUTION NO. 2011 -45 Certifying Special Assessments for Administrative Fines /Citation Costs to the Hennepin County Tax Rolls, and continuing the following assessments to March 28, 2011: 5012 Lilac Drive N., 5607 Aldrich Avenue N., and 4806 Twin Lake Avenue. Motion passed unanimously. 5. RESOLUTION NO. 2011 -46 CERTIFYING SPECIAL ASSESSMENTS FOR ADMINISTRATIVE VACANT BUILDING REGISTRATION COSTS TO THE HENNEPIN COUNTY TAX ROLLS Councilmember Roche moved and Councilmember Kleven seconded to approve RESOLUTION NO. 2011 -46 Certifying Special Assessments for Administrative Vacant Building Registration Costs to the Hennepin County Tax Rolls. Motion passed unanimously. • 8b. ORDINANCE NO. 2011 -01 AMENDING AND REPEALING CERTAIN SECTIONS OF CHAPTER 23 RELATING TO TATTOO AND BODY PIERCING ESTABLISHMENTS Mr. Boganey introduced the item, discussed the history, and stated the purpose of the proposed ordinance to shift the administration of licensing and inspection of tattoo and body piercing establishments to the State. He noted this matter is scheduled tonight for Public Hearing and adoption. Councilmember Kleven moved and Councilmember Roche seconded to open the Public Hearing. Motion passed unanimously. No one wished to address the Council. Councilmember Kleven moved and Councilmember Roche seconded to close the Public Hearing. Motion passed unanimously. Councilmember Kleven moved and Councilmember Roche seconded to adopt ORDINANCE NO. 2011 -01 Amending and Repealing Certain Sections of Chapter 23 Relating to Tattoo and Body Piercing Establishments. 03/14/11 -7- DRAFT Motion passed unanimously. • 9. PLANNING COMMISSION ITEMS 9a. PLANNING COMMISSION APPLICATION NO. 2011 -002 SUBMITTED BY MARK KEMPER, PLS. REQUEST FOR PRELIMINARY PLAT /SUBDIVISION APPROVAL OF STORLA ADDITION, A LOT DIVISION TO CREATE A NEW RESIDENTIAL LOT AT 6536 WILLOW LANE Director of Business and Development Gary Eitel provided an overview of Planning Commission Application No. 2011 -002 to subdivide the property into two lots. He advised the Planning Commission recommended approval of the application, subject to four conditions, at its February 17, 2011, meeting. 1. RESOLUTION NO. 2011 -47 REGARDING THE DISPOSITION OF PLANNING COMMISSION APPLICATION NO. 2011 -002, A REQUEST FOR PRELIMINARY PLAT /SUBDIVISION APPROVAL OF 6536 WILLOW LANE Councilmember Roche moved and Councilmember Kleven seconded to approve RESOLUTION NO. 2011 -47, Regarding the Disposition of Planning Commission Application No. 2001 -002 a Request for Preliminary Plat/Subdivision Approval at 6536 Willow Lane. Motion passed unanimously. • 9b. PLANNING COMMISSION APPLICATION NO. 2011 -003 SUBMITTED BY LOREN VAN DER SLIK, REQUEST FOR PLANNED UNIT DEVELOPMENT AMENDMENT TO THE BROOKDALE C- 2/PUD, THE REDEVELOPMENT OF THIS REGIONAL SHOPPING MALL TO A 65 ACRE TOWN CENTER COMMERCIAL DEVELOPMENT TO BE KNOWN AS SHINGLE CREEK CROSSING Mr. Eitel provided an overview of Planning Commission Application No. 2011 -003, a Planned Unit Development (PUD) amendment to redevelop the Brookdale Shopping Mall to a 65 -acre town center commercial development to be known as Shingle Creek Crossing. He described the Brookdale PUD modification to development standards and proposed Shingle Creek Crossing's changes to the Brookdale PUD. Slides were displayed of the subject site and locations of proposed retail development, restaurants, and Super Walmart, the anchor tenant. Mr. Eitel presented the phasing plan, noting that Phase II will be market driven and during that time the site will be maintained. He presented plans for the storm sewer, sanitary sewer, lighting, and landscaping that included pedestrian friendly pathway and sidewalks. Mr. Eitel displayed the Shingle Creek daylighting plan and described the proposed pond water feature. It was noted that Hennepin County is currently studying the possibility of full daylighting and that report will be considered by the Council in April. Slides were also displayed depicting the • 03/14/11 -8- DRAFT appearance of exterior elevations and architectural treatment. Mr. Eitel advised the Planning • Commission recommended approval of the applications at its March 10, 2011, meeting, subject to seven conditions. Councilmember Roche moved and Councilmember Kleven seconded to accept the Planning Commission's findings and recommendations on approving the PUD Amendment for Shingle Creek Crossing and authorize the City Attorney to prepare the appropriate resolution and PUD development agreement for Planning Commission Application No. 2011 -03 submitted by Loren Van Der Slik for PUD Amendment approval to the Brookdale C -2 /PUD. Mayor Willson commended staff for its work to bring forward this redevelopment, which meets Council's goals to aggressively pursue redevelopment. Motion passed unanimously. 10. COUNCIL CONSIDERATION ITEMS 10a. ORDINANCE AMENDING AND REPEALING CERTAIN SECTIONS OF CHAPTERS 1 AND 19 RELATING TO PRIVATE KENNEL LICENSES Mr. Boganey introduced the item, discussed the history, and stated the purpose of the proposed ordinance, which was a housekeeping amendment and removes reference to private kennel licenses from the City Code since such private kennels no longer exist. • Councilmember Kleven moved and Councilmember Roche seconded to .a rove first reading of pp g Ordinance Amending and Repealing Certain Sections of Chapters 1 and 19 Relating to Private Kennel Licenses, and set second reading and Public Hearing for April 11, 2011. Motion passed unanimously. 11. COUNCIL REPORT Councilmember Roche reported on his attendance at the March 5, 2011, Council Retreat where strategic outcomes, measurable successes, and a vision was established. Councilmember Kleven reported on her attendance at the following: • March 1, 2011, Crime Prevention meeting • March 5, 2011, Council Retreat • March 8, 2011, Community Forum on recycling in Crystal • March 10, 2011, Association for Responsible Management meeting • March 10, 2011, Planning Commission meeting Councilmember Kleven reported on updating of Panera Restaurant and its Rewards Program. Mayor Willson reported on his attendance at the following: . • March 4, 2011, funeral for Brooklyn Park Mayor Lampi 03/14/11 -9- DRAFT • March 5, 2011, Council Retreat • March 7, 2011, Featured speaker at the School of Urban Ministry Program, Brooklyn • Center Lutheran Church of the Master • March 8, 2011, Dangerous Dog Hearing • March 9, 2011, North Metro Mayors meeting and Legislative reception 12. ADJOURNMENT Councilmember Roche moved and Councilmember Kleven seconded adjournment of the City Council meeting at 7:58 p.m. Motion passed unanimously. • • 03/14/11 -10- DRAFT City Council Agenda Item No. 6b • • COUNCIL ITEM MEMORANDUM DATE: March 22, 2011 TO: Curt Bo ane an g y, City Manager FROM: Maria Rosenbaum, Deputy City Clerk SUBJECT: Licenses for City Council Approval Recommendation: It is recommended that the City Council consider approval of the following licenses at its March 28, 2011, meeting. Background: The following businesses /persons have applied for City licenses as noted. Each business /person has fulfilled the requirements of the City Ordinance governing respective licenses, submitted appropriate applications, and paid proper fees. Applicants for rental dwelling licenses are in compliance with Chapter 12 of the City Code of Ordinances, unless comments are noted below the property address on the attached rental report. MECHANICAL Alta Htg and Plbg (dba Clearwater Plbg & Htg) 19260 Mushtown Roadd, Prior Lake . CenterPoint Energy 9320 Evergreen Boulevard, Coon Rapids Gorham Oien Mechanical Inc. 841 E Forest Avenue, Mora Infinity Heating and Air 1017 Meadowwood Drive, Brooklyn Park LBP Mechanical 315 Royalston Avenue N, Minneapolis Mike's Custom Mechanical,Inc. 3946 Central Avenue NE, Columbia Heights Minnesota Heating and Air 10701 93` Avenue N, Maple Grove Quality Refrigeration, Inc. 6237 Penn Avenue S, Richfield Sedgwick Htg and Air 1408 Northland Drive, Mendota Heights RENTAL See attached report. • Mission: Ensuring an attractive, clean, safe conuru {nity this enhances the quality ,of life and preserves the public trust COUNCIL ITEM MEMORANDUM Rental License Category Criteria Policy - Adopted by City Council 03 -08 -10 • Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type I — 3 Year 1 -2 units 0 -1 3� pmts 00 75 Type II — 2 Year 1 -2 units Greater than 1 but not more than 4 its Greater 0 75 but nat mo�r'thfin Type III —1 Year 1 -2 units Greater than 4 but not more than 8 Type IV — 6 Months 1 -2 units Greater than 8 t�l. an . s License Number of Units Validated Calls for Disorderly Conduct Category Service &Part I Crimes (Calls Per Unit/Year) No Category 1 -2 0 -1 Impact s 5 or more units 0-0.35 Decrease 1 1 -2 Greater than 1 but not more than 3 5 but riot mare fihanl Category 5 or more units Greater than 0.35 but.not more than 0.50 Decrease 2 1 -2 Greater than 3 Categories 4 units gr eater than .rf 5 or more units ° Greater than 0.50 Budget Issues: There are no budget issues to consider. • !tilission: Ensuring an attractive, clean, safe community that enhances the duality of life and preserves the public trust Rental Licenses for Council Approval on March 28, 2011 PropertyFinal DwellingRenewalLicensePoliceUnpaidUnpaid CodeLicense Property AddressTypeor InitialOwnerViolationsTypeCFS *Type **UtilitiesTaxes 1600 69th Ave N Single FamilyInitialVo Hieu3IIN/AIIOKOK Passed w/Weather Deferral 5916 Aldrich Ave NSingle FamilyInitial2IIN/AIIOKOK Hue Xiong 5914 Fremont Ave N Single FamilyInitial2IIN/AIIOKOK Passed w/Weather Deferral Queena Sloan 6828 Fremont Pl NSingle FamilyInitial2IIN/AIIOKOK Ali Sajjad 3701 Woodbine LaSingle FamilyInitial0IIN/AIIOKOK Rose Blalock 5949 York Ave N Single FamilyInitial3IIN/AIIOKOK Passed w/Weather Deferral Orrin Hager Evergreen Park Manor5 Bldgs8917 RenewalIIIIOKOK 7200-7224 Camden Ave N80 Units1.12/Unit.22/Unit Sean Bannerman Willow Lane Apartments2 Bldgs787 RenewalIIIIOKOK 7015-21 Brooklyn Blvd58 Units1.35/Unit.12/Unit Jason Quilling 1 BldgEvangelical Lutheran51 1100 69th Ave N 7 UnitsChurch of the Master.71/Unit.15/Unit Renewal I I OKOK 7230 West River Rd1 Bldg33 Passed w/Weather Deferral4 Units.75/Unit.75/Unit RenewalNedim & Adisa FrljIIIOKOK 1 2401-03 54th Ave NTwo Family (2)0 .5/Unit RenewalKarboy Properties LLCIIOKOK 4700 Lakeview Ave 20 Passed w/Weather Deferral Two Family (1)RenewalNancy DahlquistIIIIOKOK 3612 55th Ave NSingle FamilyRenewal0I0IOKOK Lutheran Social Service of MN 00 3006 63rd Ave NSingle FamilyRenewalJohn & Anita LandryIIOKOK 2928 67th Ln N00 Single FamilyRenewalBenjamin & Nicole TrammIIOKOK 4824 71st Ave N 30 Passed w/Weather Deferral Single FamilyRenewalC & D Angell's Property MgmtIIIIOKOK 6018 Admiral Pl 20 Passed w/Weather Deferral Single FamilyRenewalLutheran Social Service of MNIIIIOKOK 5603 Bryant Ave N 22 Passed w/Weather Deferral Single FamilyRenewalMichael SkrogstadIIIIIOKOK Rental Licenses for Council Approval on March 28, 2011 PropertyFinal DwellingRenewalLicensePoliceUnpaidUnpaid CodeLicense Property AddressTypeor InitialOwnerViolationsTypeCFS *Type **UtilitiesTaxes 6006 Bryant Ave N61 Single FamilyRenewalFaheem RizviIIIIIIOKOK 7142 France Ave N10 Single FamilyRenewalDeepak NathIIOKOK 5401 Humboldt Ave N 11 Passed w/Weather Deferral Single FamilyRenewalWilliam BrookIIOKOK 6813 Humboldt Ave N B20110 Single FamilyRenewalStephanie Sinise FordIIOKOK 5712 Logan Ave N40 Single FamilyRenewalDwayne MeierIIIIOKOK 6901 Quail Ave N20 Single FamilyRenewalLin Shuang, LLCIIIIOKOK 6912 Unity Ave N00 Single FamilyRenewalGeri WilliamsIIOKOK * CFS = Calls For Service for Renewal Licenses Only (Initial Licenses are not applicable to calls for service and will be listed N/A.) ** Final License Type Type I = 3 yearType II = 2 yearType III = 1 yearType IV = 6 mos • City Council Agenda Item No. 8a • 3/28/2011 SPECIAL ASSESSIVIE HEARING APPEAL CONTINUED FROM MARCH 14, 2011 PUBLIC HEARING Brooklyn Center Presented by: City Council Meeting Vickie Schleuning,Assista March 28, 2011 Building and Com. „a ;r KNE”, 1 3/28/2011 Assessment Appeal Summar • On March 14, 2011 six property owners appealed their special assessment at the public hearing. • Per Council request, a report containing information relating to each property assessment has been produced. • A brief summary of each case follow s 2 3/28/2011 501.2 Lilac Dr N q o Appeal Basis: The property owner was not sure why he received a fine. He said he did v �u. not receive notices. e o Findings: • The case against the property was initiated as a result of a citizen complaint. • Staff found a vehicle being supported by a jack and � �� a car battery placed behind a tire. • Compliance Notices were mailed to a Minneapolis address per property ownership records and to the resident of the property. • Two warning Notices were sent prior to citations being issued. 3 3/28/2011 3 5012 Lilac Photos oug !I '"rSr✓,wzr. .. n y�l �f�dl4ry� i+is i . ^n r i l y I a y 4 3/28/2011 5607 Aldrich Ave N o Appeal Basis: The owner stated that the painting repairs were completed before the citation was issued and the vehicle is now registered. o Findings: • The property owner was sent multiple notices and given verbal warnings prior to the citation being issued for an inoperable vehicle. • A vehicle stored on blocks is considered an inoperable vehicle according to city ordinan citation was not issued for the paintin , 5 3/28/2011 5607 Aldrich Ave N Photos 407/2W201 0 wilh k. ( k N i �K�Y o-✓ fi�f �� � idSY:� iA R'I�y III`�e f� `��l � y y.Z�.,-'� 1� r 1" 6 3/28/2011 DRIMi 4806 Twin Lake Ave N � 3 o Appeal Basis: The owner stated that he did not receive the letters or hone message and was unaware of the new rental license system, o Findings: • The property owner was initially notified of the new rental ordinance through his rental property renewal packet that was mailed prior to the application being submitted. • The owner was sent a letter on 0 -10-10 and 09-10-10 stating the license requirement to submit an Action Plan. The letters were sent to the address listed on the rental license application, which is the same address listed on the Hennepin County property records website. • A phone message was also left for the property owner on the `z" number provided by the applicant on the rental license application. `' • Since an action plan was not submitted, an administrative citation was issued. Information including the ten-da notification process, was provided with the citati was made regarding the citation, . � F_ 3/28/2011 5800 Ewing Ave N • Appeal Basis: A long grass/weed abatement was conducted prior to the current owner purchasing the property. • Findings: • Compliance Notices were sent and a city-facilitated abatement involving long grass/weeds was conducted prior to the new owner taking possession of property. • Mr. Jones purchased the property on 11-12-10. At the time of purchase, the charge was processed as a pending special assessment. This information was made available for review by the closing company, purchaser, or other party. • After the public hearing, staff spoke to the current owner about the process. Since then, the closing company made the payment and the special assessment is no longer required. e 8 3/28/2011 5500 Ewing Ave N Photos s e{{ pill .'� "�- 'lore✓�� k 4 �$ a T k 9 3/28/2011 120157th Ave N 11 o Appeal Basis: The property owner stated that a small area of grass was not cut, but the majority of the yard was cut. o Findings: • The property owner had two instances of long grass in 2010. • The owner received a notice on both occurrences. Because the property was found to have violations of long grass/weed over 8 inches on the property two times within a growing season, a $100 reinspection fee w charged according to the City Fee S MR. 10 3/28/2011 12015711 Ave N Photos kr--' br i r ,fix a i y d s 11 3/28/2011 5931 Vincent Ave N o Appeal Basis: The property owner stated she cannot afford the cleanup costs of the city-facilitated abatement. Her husband left and she couldn't get the wood cleaned up quickly enough. o Findings: • The property was vacant and was found to have junk and garbage accumulating outside at the property. • Notice was given prior to the abatement of junk/debris being conducted. • The property remains vacant and was in foreclosure with a redemption period that expired on March 22, 2011 . • Rose Dominguez is no longer the property owner. • Special assessments are applied to the property. 12 3/28/2011 5931 Vincent Ave N Photos �Y t + f k i. a �7 ,v�✓"l' � r�r' yrir - 1 , r 13 3/28/2011 5931 Vincent Ave N Photos Cont. VIAL ` W 14 3/28/2011 Questions? r R � Thank you 15 COUNCIL ITEM MEMORANDUM • DATE: March 28, 2010 TO: Curt Boganey, City Manager FROM: Vickie Schleuningrxssistant City Manager /Director of Building and Community Standards SUBJECT: Assessment Hearing Appeals Recommendation: It is recommended that the City Council consider approval of the attached resolutions. Background: At the City Council Meeting on March 14, 2011 the City Council moved to continue the hearing and until March 28 and requested additional information for certain properties where appeals were made regarding the special assessments. The appealed special assessments were the results of three unpaid administrative fines /citations, two long grass /weed abatements and one other nuisance abatement completed in 2010. As part of the process, property owners were given notice to correct violations, received notice to pay the bills, and all unpaid fees were processed as a pending special assessment. The pending special assessment amounts are available to the public, including title companies when a property sale takes place. Information specific to each special assessment appeal is provided. Please note that a report for the special assessment appeal for 5800 Ewing Ave N is not included since the special assessment amount was paid on March 21, 2011 by the title company that processed the sale. Therefore, this special assessment has been removed. Budget Issues: The fees for these special assessments help recover the city costs associated with providing a service. Nuisance abatements are related to the direct costs incurred as a result of hiring a contractor to correct the violations at the property, as well as administrative costs related to compliance. Administrative fines occur where voluntary compliance is not achieved and additional staff time occurs to gain compliance. Council Goals: Strategic: 3. We will stabilize and improve residential neighborhoods Ongoing: 1. We will provide streamlined, cost effective, quality services with limited resources • Page 1 of 16 :Mission: Ensuring an attractive, dean, safi� community that enhances the tlualitp of'life andpreserves the public trust COUNCIL ITEM MEMORANDUM Attachments: • Summary of Appealed Properties pp p Resolution Amended Special Assessment Certified Roll • • Page 2 of 16 Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust COUNCIL ITEM MEMORANDUM Address: 5012 Lilac Drive Owner: Sylvester Seward Appellant's Appeal: The property owner was not sure why he received a fine. He said he did not receive notices. Findings: The case against the property was initiated as a result of a citizen complaint. Staff found a vehicle being supported by a jack and a car battery placed behind a tire. Compliance Notices were mailed to a Minneapolis address and to the resident of the property. Two warning Notices were sent prior to any citations being issued. Violation Type Action Dates Action Fees Unlicensed/ 06 -01 -10 Complaint received regarding vehicles and junk Inoperable at the property. Vehicle 06 -03 -10 1" Compliance Notice — Vehicle on Jack and car battery was blocking tire. 06 -14 -10 2" Compliance Notice - Vehicle on Jack and car battery was blocking tire. 06 -21 -10 Violation not corrected. County Citation Issued for inoperable vehicle. 07 -06 -10 Violation not corrected. Administrative $125.00 Fine /Citation Issued for Inoperable Vehicles. 07 -20 -10 Door Tag — Notice placed on vehicle. 07 -20 -10 Phone Call received from occupant stating violation would be corrected. 07 -26 -10 Follow -up inspection revealed all violations were corrected. 08 -13 -10 Pending Assessment a ` \ ®7/00/x® so Page 3 of 16 Mission: Ensuring an attractive, clean, safe conununil►' that enhances the gualin of life and preserves the public trust^ COUNCIL ITEM MEMORANDUM Address: 5607 Aldrich Ave N Owner: Dawn Gieseke Appellant's Appeal: Owner states that painting repairs were completed before citation was issued and the vehicle is now registered. Findings: The property owner was sent multiple notices and given verbal warnings prior to the citation being issued for an inoperable vehicle. The citation was issued for an inoperable vehicle stored on blocks. A citation was not issued for the painting violation. Violation Type Dates Action Fees Unlicensed 06 -10 -10 A complaint was received regarding a vehicle placed on Inoperable blocks with expired tabs. Vehicle 06 -11 -10 1 Compliance Notice — Vehicle on blocks with expired tabs. 06 -21 -10 2 nd Compliance Notice — Vehicle on blocks with expired tabs. 07 -06 -10 Phone Call — Inspector issued warning related to violations. 07 -15 -10 Door Tag — Vehicle was licensed but remained on blocks so a notice was left at the door of the property. 07 -19 -10 The owner left a phone message stating she would not remove the blocks in order to protect the tires. A return message was left by the inspector stating it was a violation and must be corrected. 07 -26 -10 Violations were not corrected so an administrative citation $125 was issued for an inoperable vehicle. 08 -09 -10 An inspection revealed the vehicle violation was corrected. 08 -13 -10 Pending Assessment for unpaid citation. Exterior /Walls 06 -11 -10 1 Compliance Notice — Peeling paint observed on siding of garage. 06 -21 -10 2" Compliance Notice — Peeling paint remained. 07 -06 -10 Phone call - Verbal Warning left regarding painting. 07 -15 -10 Door Tag — Re quest regarding repair of garage paint. 08 -12 -10 3` Compliance Notice sent regarding aint repairs. 09 -13 -10 Ins ection revealed painting violation was completed. r- F73',li�,�tT�„ Ott+ Page 4 of 16 Mission: Ensuring an attractive, clew:, safe comin uritp that enhances the quali!v of life and preserves the public trust --E -_ COUNCIL ITEM MEMORANDUM Address: 4806 Twin Lake Ave Owner: Douglas Wahl Appellant's Appeal: The owner states that he did not receive the letters or phone message and was unaware of the new rental license system. Findings: The property owner was initially notified of the new rental ordinance through his rental property renewal packet that was mailed prior to the application being submitted. After the Type III license category was determined, the owner was sent a letter on 08 -10 -10 and 09 -10- 10 notifying of the license requirement to submit an Action Plan. The letters were sent to the address listed on the rental license application, which is the same address listed on the Hennepin County website. A phone message was also left for the property owner on the number listed on the rental license application. Since an action plan was not submitted, an administrative citation was issued. Information, including the ten -day appeal notification process, was provided with the citation. No appeal was made regarding the citation. Violation Type Action Dates Action Fees Failure to submit 8 -10 -20 1" Compliance Notice sent letter to address Action Plan listed on the application. 9 -10 -10 2 Compliance Notice sent to address listed on application. 11 -17 -10 An administrative citation issued for failure to $125.00 submit an action plan. 11 -18 -10 Pending Assessment for nonpayment. 11 -26 -10 Staff spoke to owner by telephone who stating action plan would be submitted by 12/08/2010. 12 -17 -10 Staff met with owner and received action plan. 12 -27 -10 The Action Plan was approved. ( *No picture included.) Page 5 of 16 Mission: Ensuring an attractive, clean, safe conununitr that enhances the quality of /ife and preserves the public trust IN COUNCIL ITEM MEMORANDUM NOTE: This property has been removed from the s ecial assessment list due to payment. Address: 5800 Ewing Ave N Owner: Teizu Jones Appellant's Appeal: A long grass /weed abatement was conducted prior to the current owner purchasing the property. Findings: Compliance Notices were sent and a city- facilitated abatement involving the grass being mowed was conducted prior to the new owner taking possession of property. Mr. Jones purchased the property on 11- 12 -10. At the time of purchase the charge was processed as a pending assessment and would have been available for the closing company. Violation Type Action Dates Action Fees Tall Grass & 05 -18 -10 Complaint received from citizen regarding Noxious Weeds long grass. 05 -19 -10 1" Compliance Notice- Grass observed to be over 8 inches. 05 -28 -10 Referred to Grass Cutter — Grass remained in violation. 05 -29 -10 Grass Cut by City 06 -07 -10 Owner Invoiced /Pendin Assessment $294.28 03 -14 -11 After the public hearing, the owner was advised to contact the closing company to ac uire payment for the special assessment. 03 -21 -11 Payment received from title company and - $294.28 property was removed from special assessment list. ► t y ci ,. • ,ta f { F y.1. L f ' 28/05/2010 09 i I'agr 6 of 16 Mission: Ensuring an attractive, clean, safe communih' that enhances the gualigl of life and preserves the public trust COUNCIL ITEM MEMORANDUM Address: 120157 th Ave N Owner: Edward Doll Appellant's Appeal: The property owner stated that a small area of grass was not cut, but the majority of the yard was cut. Findings: The property owner had two instances of long grass in 2010. The owner received a notice on both occurrences. Because the property was found in violation of the long grass /weed ordinance two times within a growing season, a $100 reinspection fee is charged according to the City Fee Schedule. Violation Type Action Dates Action Fees Tall Grass & 06 -18 -10 A complaint was received from a citizen. Noxious Weeds 06 -18 -10 1 st Compliance Notice sent regarding grass observed over 8 inches in height. 06 -29 -10 Grass was cut by owner and no longer in violation 08 -26 -10 A complaint was received from a citizen. 08 -27 -10 1" Compliance Notice sent for long rass /weeds over 8 inches in height. 09 -03 -10 The grass was cut by the owner and no longer in violation. 10 -04 -10 The owner was invoiced for the reinspection $100 fee for repeat long grass /weed violation and established as a pending assessment. 10 -15 -10 The owner called and stated he was contesting the $100 since he claimed he did not receive the second notice. ems` 7 I T 1 K �r rJ11'S �� � yam Mission: Ensuring an attractive, clean, safe connnuunih that enhances the quality of life and preserves the public trust I E COUNCIL ITEM MEMORANDUM Address: 5931 Vincent Ave N Owner: Rose Dominguez Appellant's Appeal: The property owner stated she cannot afford the cleanup costs of the city - facilitated abatement. Her husband left and she couldn't get the wood cleaned up quickly enough. Findings: The property was vacant and was found to have junk and garbage accumulating outside at the property. Notice was given prior to the abatement of junk/debris being conducted. The property remains vacant and is in foreclosure with the redemption period expired on March 22, 2011. Unless the property has been redeemed, Rose Dominguez is no longer the property owner. Special assessments are applied to the property. Violation Type Action Dates Action Fees Abatement — 10 -12 -10 A complaint was received regarding junk and large amount of garba e at a vacant property garbage and 10 -12 -10 The property was found to have extensive junk, Junk garbage, and other debris outside of the property. The property was also found unsecure and open to trespass. An Abatement Notice was posted at the property and mailed to the owner of record. 10 -15 -10 A city- facilitated abatement was conducted to clean up the property. 10 -19 -10 The owner was invoice and the unpaid fees $665.00 established as a pending assessment. P11 Page 8 of 16 Mission: Ensuring an attractive, clean, safe conununitr that enhances the quality of life and preserves the public trust No COUNCIL ITEM MEMORANDUM Rep rt 591 V 1 �l 1 9 � Page 9 of 16 Mission: Ensuring an attractive, clean, safe comnurnitr that enhances the quality of life mud preserves the public trust Member introduced the following resolution and moves its adoption: • RESOLUTION NO. RESOLUTION CERTIFYING SPECIAL ASSESSMENTS FOR WEED REMOVAL COSTS TO THE HENNEPIN COUNTY TAX ROLLS WHEREAS, the Weed Inspector of the City of Brooklyn Center has caused noxious weeds and tall grass to be cut down on properties within the City under the authority of Minnesota Statutes Section 18 -78 and City Ordinance Section 19 -1601 through 19 -1604; and WHEREAS, on March 28, 2011, certain weed destruction accounts for removal of said weeds and tall grass remained unpaid; and WHEREAS, an assessment roll for unpaid accounts from 2010, a copy of which is attached hereto and made part hereof by reference, has been prepared by the City Clerk, tabulating those properties where an unpaid weed destruction account is to be assessed, with the amounts to be assessed; and WHEREAS, Minnesota State Statute authorizes the certification of delinquent weed destruction accounts to the County tax rolls for collection; and WHEREAS, pursuant to proper notice duly given as required by law, the Council • has met and heard and passed upon all objections to the proposed assessment for weed destruction costs. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that: 1. The special assessment roll of unpaid weed destruction accounts incurred during the year 2010 is hereby adopted and certified as Levy No. 17875. 2. The special assessments as adopted and confirmed shall be payable with ad valorem taxes in 2012, in one annual installment with interest thereon at six (6) percent per annum and shall bear interest on the entire assessment from April 1, 2011 through December 31, 2012. 3. The owner of any property so assessed may at any time prior to the certification of the assessment to the County Auditor pay the whole of the assessment, to the City Treasurer, without interest, if the entire assessment is paid on or before April 13, 2011. After April 13, 2011, he or she may pay the total special assessment, plus interest. Interest will accumulate from April 14, 2011, through the date of payment. Such payment must be made by the close of business November 29, 2011 or interest will be charged through December 31 of the succeeding year. • RESOLUTION NO. 4. The .City Clerk shall forthwith transmit a certified duplication of this assessment to the County Auditor to be extended on the proper tax lists of the county and such assessments shall be collected and paid over in the same manner as other municipal taxes. March 28, 2011 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • Member introduced the following resolution and moves its adoption: RESOLUTION NO. RESOLUTION CERTIFYING SPECIAL ASSESSMENTS. FOR NUISANCE ABATEMENT COSTS TO THE HENNEPIN COUNTY TAX ROLLS WHEREAS, the City of Brooklyn Center has caused abatement removal on certain properties within the City during 2010 under the authority of City Ordinance Section 12- 1504 and Minnesota Statutes, Section 429 and/or by written agreement with the owners of such property; and WHEREAS, on March 28, 2011, certain abatement accounts remained unpaid; and WHEREAS, an assessment roll for unpaid accounts from 2010, a copy of which is attached hereto and made part hereof by reference, has been prepared by the City Clerk, tabulating those properties where abatement costs are to be assessed, together with the amounts proposed to be assessed to each property; and WHEREAS, Minnesota State Statute authorizes the certification of delinquent abatement accounts to the County tax rolls for collection; and WHEREAS, pursuant to proper notice duly given as required by law, the • Council has met and heard and passed upon all objections to the proposed assessment for abatement costs. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that: 1. The special assessment roll of abatement costs incurred during the year 2010 is hereby adopted and certified as Levy No. 17876. 2. The special assessments as adopted and confirmed shall be payable with ad valorem taxes in 2012, in one annual installment with interest thereon at six (6) percent per annum and shall bear interest on the entire assessment from April 1, 2011 through December 31, 2012. 3. The owner of any properly so assessed may at any time prior to the certification of the assessment to the County Auditor pay the whole of the assessment, to the City Treasurer, without interest, if the entire assessment is paid on or before April 13, 2011. After April 13, 2011, he or she may pay the total special assessment, plus interest. Interest will accumulate from April 14, 2011 through the date of payment. Such payment must be made by the close of business November 29, 2011 or interest will be charged through December 31 of the succeeding year. • RESOLUTION NO. • 4. The City Clerk shall forthwith transmit a certified duplication of this assessment to the County Auditor to be extended on the proper tax lists of the county and such assessments shall be collected and paid over in the same manner as other municipal taxes. March 28 2011 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • • Member introduced the following resolution and moves its adoption: • RESOLUTION NO. RESOLUTION CERTIFYING SPECIAL ASSESSMENTS FOR ADMINISTRATIVE FINES /CITATION COSTS TO THE HENNEPIN COUNTY TAX ROLLS WHEREAS, the City of Brooklyn Center has caused Administrative Fines /Citation costs for certain properties within the City during 2010 under the authority of City Ordinance Section 18 -204 and Minnesota Statutes, Section 429; and WHEREAS, on March 28, 2011, certain Administrative Fines /Citation costs remained unpaid; and WHEREAS, an assessment roll for unpaid accounts from 2010, a copy of which is attached hereto and made part hereof by reference, has been prepared by the . City Clerk, tabulating those properties where Administrative Fines /Citation costs are to be assessed to each property; and WHEREAS, City Ordinance Section 18 -210 and Minnesota State Statute authorizes the certification of certain delinquent Administrative Fines /Citation accounts to the County tax rolls for collection; and • WHEREAS, pursuant to proper notice duly given as required by law, the Council has met and heard and passed upon all objections to the proposed assessment for Administrative Fines /Citation costs. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that: 1. The special assessment roll of Administrative Fines /Citation costs incurred during the year 2010 is hereby adopted and certified as Levy No. 17880. 2. The special assessments as adopted and confirmed shall be payable with ad valorem taxes in 2012, in one annual installment with interest thereon at six (6) percent per annum and shall bear interest on the entire assessment from April 1, 2011 through December 31, 2012. 3. The owner of any property so assessed may at any time prior to the certification of the assessment to the County Auditor pay the whole of the assessment, to the City Treasurer, without interest, if the entire assessment is paid on or before April 13, 2011. After April 13, 2011, he or she may pay the total special assessment, plus interest. Interest will accumulate from April 14, 2011 through the date of payment. • RESOLUTION NO. • Such payment must be made by the close of business November 29, 2011 or interest will be charged through December 31 of the succeeding year. 4. The City Clerk shall forthwith transmit a certified duplication of this assessment to the County Auditor to be extended on the proper tax lists of the ` county and such assessments shall be collected and paid over in the same manner as other municipal taxes. March 28 2011 Date - Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: • and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • Amended Special Assessment Certified Roll (Grass/Weeds) 2010 Weed Destruction Printed March 18, 2011 Municipal Code No. 22 Levy No. Owner Name Property Address Property ID Pending Capital Special Total Amount Interest Assessment Amount Charge Charge Certified 17875 Edward Doll 1201 57 Ave N 01- 118 -21 -32 -0105 100.00 10.00 30.00 140.00 Amended Special Assessment Certified Roll (Grass/Weeds) 2010 Nuisance Abatement Printed March 18, 2011 Municipal Code No. 22 Levy No. Owner Name Property Address Property ID Pending Capital Special Total Amount Interest Assessment Amount Char e Char e Certified 17876 Rose Dominguez 5931 Vincent Ave N 02- 118 -21 -22 -0038 665.00 10.00 30.00 705.00 Amended Special Assessment Certified Roll (Grass/Weeds) 2010 Administrative Fine /Citation Printed March 18, 2011 Municipal Code No. 22 Levy No. Owner Name Property Address Property ID Pending Capital Special Total Amount Interest Assessment Amount Charge Char e Certified 17880 Dawn Gieseke 5607 Aldrich Ave N 01- 118 -21 -31 -0090 125.00 10.00 30.00 165.00 17880 Sylvester Seward 5012 Lilac Dr 10- 118 -21 -13 -0030 125.00 10.00 30.00 165.00 17880 1 Douglas Wahl 14806 Twin Lake Ave 10- 118 -21 -32 -0061 125.00 10.00 30.00 165.00 City Council Agenda Item No. 8b • • �1cw d�n�awF@' r� Public Sector Advisors Op AL i Springsted city of BROOKLYN CENTER Tax Increment Financing Plan for Tax Increment Financing District No. 5 A Renewal and Renovation District Shingle Creek Crossing Project March 28, 2011 PRESENTER: Jenny Wolfe, Senior Project Manager Public Sector Advisors [] Springsted Purpose of TIF Plan • Provides statutory authorization to use tax increment financing • Contents of TIF Plan and terminology required by State Statute • TIF Plan based on assumptions of redevelopment TIF Plan is not a commitment to provide subsidy (Plan provides framework only) Recommend Plan with maximum flexibility Public Sector Advisors Springsted Statutory Requirements of the TIF Plan • A statement of objectives for the improvements of the project; • A statement of any property the Authority intends to acquire; • A list of the development activities and expected timing; • Estimated cost of the project to be paid or financed with tax increments from the District; • Estimated amount of bonds to be issued; Public Sector Advisors 3 El Springsted Statutory Requirements of the TIF Plan (Cont' d) • Estimate of the original net tax capacity (ONTC); • Estimate of captured net tax capacity (CNTC) at completion; • Estimate of duration of TIF District; • Statement of alternate impacts; • Identification of all parcels within the TIF District; • Estimate of fiscal and economic implications of the proposed TIF District. Public Sector Advisors 4 Springsted Municipality Findings • That the proposed area qualifies as a Renewal and Renovation TIF District; • That the proposed redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; • That the increase in market value that could reasonably be expected to occur without the use of TIF would be less than the increase from the proposed development after subtracting the present value of the projected tax increments; • That the TIF plan conforms to the general plan of the City; • That the tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise. Public Sector Advisors 5 U Springsted i •♦.� .i. �J.J JJ1 }J '♦ �JJJ I J.JJ ; .. JJsi .r+J � • ". .. ' .♦ J ..- ./ CVI.NII FUnJ (. 'JJJ ,}.J �.�.r JJ.� , v . f r� d.f.y.gry,,.-.ms.,µ._,.....,+-' -..w . ;-r,..... r- '�wwfiisrtaYn=.�♦vtAi-.f-. Ism- ot c , 11 1 ., + If o.. t ♦♦, r „ Vf ctr, Ilk 1 c.wc♦cc..rs OF 1 .,� ,, !� ,, _ •' BROOKDALE CENTER REDEVELOPMENT s ,� a October2010 op . x Kimle Horn �. GAU DEWN f OOMY and Associates. Inc. ow (fI 9 Public Sector Advisors Springsted Housing Development and Redevelopment Project No. 01 Project Areas Map of TIF District and Project Area Public Sector Advisors r, 3, Springsted Tax Increment Financing District No. 5 Shingle Creek Crossing Town Center P.U.D. T EWNG AWE N 59T11 Ma of TIF � - AVE N ...... � 58 V2AYE N gSTt District 4 AWE N ------•.- 3 '; ADlAt7,y,LN N �_ .,.... n r (� SETH AVEN ERICON DR 51, i 56T4 AVE N :._- �, r 55TH AVE N 54TM AVE N CF toA �. _V `• > w 7 54TH AVE N SM PL N L AC DR N 53RD AVE N k .� fv 5 7 1t � S3IDWEN:`.�_ � 5i'tD AVEN T # W z 'r jt1` z w ff V N \ 2 `v 5t9TAVEN f W TYP S 6� ' C W O SOTH AVE N ? i SQTH AVE N OTH AVE N nnxLSA" CEA rye n.xars urr ws _ k Public Sector Advisors Springsted Parcels within the TIF District Parcel ID: School District Address Partial Legal Description 02-118-21-32-0017 #281 1108 Brookdale Center Reg. Land Survey No. 1766, Tract A 02-118-21-32-0014 #281 1200 Brookdale Center Reg. Land Survey No. 1710, Tract B 02-118-21-32-0009 #281 1265 Brookdale Center Reg. Land Survey No. 1469, Tract C 02-118-21-32-0010 #281 1265 Brookdale Center Reg. Land Survey No. 1469, Tract D 02-118-21-32-0011 #281 1100 Brookdale Center Reg. Land Survey No. 1469, Tract E 02-118-21-23-0021 #281 No address Reg. Land Survey No. 1469, Tract A 02-118-21-23-0023 #281 1150 Brookdale Center Reg. Land Survey No. 1710, Tract C 02-118-21-31-0055 #286 2501 County Road No. 10 Reg. Land Survey No. 1614, Tract A Public Sector Advisors 0 Springsted Renewal and Renovation D • Qualifications — Improved parcels make up at least 70% of the district. — More than 20% of the buildings (excluding outbuildings) are structurally substandard to a degree requiring substantial renovation or clearance. — A building is not considered substandard if it could be brought up to code at a cost of less than 15% of a comparable new building on that parcel. — More than 30% of the other buildings (excluding outbuildings) require substantial renovation or clearance to remove existing conditions ... Public Sector Advisors 10 Springsted Renewal and Renovation Determination City retained Alden Associates Architectural Services to survey and evaluate the properties within the proposed TIF District. • Alden Associates Architectural Services independently ascertained that the qualification tests for tax increment eligibility, as required under Minnesota Statute, could be met for a Renewal and Renovation District. Public S.ector Advisers 11 [] Springsted Renewal and Renovation Determination • There are eight (8) parcels within the District; • Four (4) buildings on 4 parcels, and 4 parcels with paving improvements; Finding - 100% of the parcels met the coverage test j (more than 15% of parcel improved) - Exceeds 70% area coverage requirement Public Sector Advisors 12 Springsted A, 1 1 e JK BROOKDALE TIF DISTRICT REDEVELOPMENT ELIGIBILITY ASSESSMENT PERCENT OCCUPIED 50-66%OCCUPIED W90%OCCUPIED 1,W%OCCUPIED Public Sector Advisors springsted Ail W. .t a• - 14TY 4i\. a ,.+w+,rte.,I.�H'%��w' .... ✓ z� ate � �� �.. '\- �� ♦. .`y' • ,.�y ti Zy N 1RY *«� �r2 t- j^ • ' tea'S ~7 Yf a w00m"Yap jr.*,vt ' .: s1 ,A� i ♦ t 3 ♦ •� :fir` K t ♦ JCFE w / ±` ♦ r BROOKDALE TIF DISTRICT t� � � � `" ;� , �s� REDEVELOPMENT ELIGIBILITY ASSESSMENT :1W ``� AREA UNDER STUDY .!�"' . -_ + � � ` � + " TIF DISTRICT BOUNDARY BUILDINGS UNDER STUDY 4 Tlftslk Public Sector Advisors 4 SpringSted Renewal and Renovation Determination • Of the four buildings: — One (25%) is structurally substandard — Mall building — One of remaining three buildings (33%) requires substantial renovation or clearance to remove existing conditions — JC Penney building — Other buildings include Macy's and Mervyn's — level of deficiencies not sufficient to qualify Public Sector Advisors 15 springsted Renewal and Renovation Determination Mall building found to be structurally substandard i - Significant deficiencies exist justifying substantial renovation or clearance - Not in compliance with building code applicable to new buildings and the estimated cost to modify the building to satisfy current code is more than 15% of the cost to construct a new building Public Sector Advisors Springsted Renewal and Renovation Determinatio • JC Penney building found to require substantial renovation or clearance when considering significant health and safety deficiencies and overall obsolescence, rendering the building not suitable for improvement or conversion - Significant deficiencies exist justifying substantial renovation or clearance - Not in compliance with building code applicable to new buildings and the estimated cost to modify the building to satisfy current code is more than 15% of the cost to construct a new building Public Sector Advisors 17 El Springsted Proposed Development • Proposed Project redevelops Brookdale Mall, excluding the Sears department store, demolishing three anchors and all but 123,242 s.f. of the mall space • Once complete the Project is expected to include total retail space of 514,818 s.f. as follows -- - a Walmart Supercenter (152,036 s.f.) , — three junior anchors (120,735 s.f.), — three restaurant pads (25, 160 s.f.), — six retail stores (93,645 s.f.), — 123,242 s.f. of renovated mall space • Total estimated market value is approximately $61 .38 million Public Sector Advisors Springsted M .^'►�♦ r.,•i I �q.`. 1119. .Y . '"�'�{��'`� 1'�i,^i^ ^-•�!1'►^1._�7^ `1�4'AI'^nn�11'^!.'.iQ� Q?J�^�A ;,; , ^^..:'1^.^�� ,•'�_�, , Ll COUNTY ROAD 140."1 g' 77 > rt._L w. +eEOU3wvr iJf_ ti ,ate FR_K5£3P ..tl r , i 1,^ •�^ .� 1.'1 ,151�y 1♦FA I ' Gw s ^. .�• I 1 ! i' A. 81ERC^,EAIEII 4 -`• � .. � ����AI!'�I►fIP ®� �, / '�..� 1 d. ., syraXE WWt". ; ,' � ,� • 1 4 moo +y 4 OON4ECT.3 6087m Snow :i t � �S c i .;p 04 I r r SHINGLE CREEK CROSSING MASTER PLAN FEBRUARY 2011 e w®tt© CD bkb- Kimley-Horn GAT1aIId DEPEt,OPNW COMPANY and Associates,Inc. lr. 11,btlu. Public Sector Advisors Springsted 1 m., T �•�`` ..,.� COUNTY RU ND 10 BASS LAKE ROAD COUNTY COUNTY PD NO 10 BASS IAI(E RD. ...._. _ --...,.....m. WAS• 5l '� � H I• LOT 1. — — T`. F� C.Y� ,\ '� 0� i TLOTB '� "...y,,.i� ``•.*4tdyF4.3��4.. `�� i n, r�� �. U p ,\ � ,,,-' `'O Q�� i• � J J ,�k�`,., `4�r�•�,,/'��,f/r �[j�dE 5 PvrU-E LOT L011 r" wah owl ULO- C 1 NFOL MO , 1f2.ON t.F.IAPPRO%.) ' PHASING HATCH LEGEND: w E ! t PHA.1E I—COMPLETE STE BULD—DUT v, `' t' >r { ' ��, `•`•.� �; I PHASE It{AS LEASING PROGRESSES) CL i 1 I i l f IUTLTES 98111,SMPPP PRD mm m 0200E ET TO I ELEWVMI ,• 1. �j {F APEA NOT TO R 1 .57 -• `..'-"�� }}Ejt• �`5 ` (11J' b4TLOTA `r� CIONSTRUCTICIJW DISTURBED DURING z U: : LLJ z •"r i'.� 1fEAP1 PNOPEREi7_..t r�! A pia®x lia caE W W 1YOT A PART DFIRIS i• -'r r2 CZ K PMJJECT •` r -- Hl eYRR TA C WRiRCT CJ Y P• 1�� "(k /{'(� GOPHER STATE CALL ONE u} } + $��" "'••t'� // 2y.�,,�' YR 1P1L P$1�11M W Y 1 ```\ Y' �,�` (i r •F/r "�' J..'• TMI CITY I h W- I5N-CWE Z 0 tiEPOa4a-O'esnewa-P^_wcnawanm ?' � �wrDr PIw1Rao4 w x Im1i nom#�,0 110174 D01 ! 02 i Public Sector Advisors 20 Springsted Captured Tax Increment • Property taxes generated by the parcels within the District prior to certification of the TIF District continue to flow to individual taxing jurisdictions (e.g. City, County, ISD). • Increased market value within the TIF District is captured to generate tax increment based on the tax rate in place when the TIF District is certified Renewal and Renovation TIF District maximum term is 16 total years (15 years after receipt of first increment) • Estimated first year is 2013 and final year is 2028 Public Sector Advisors n Springsted Captured Tax Increment (Cont' d) • Estimated Market Value of all property within TIF District is $12,645,000 as of January 2, 2010, for taxes payable in 2011 - estimated original net tax capacity (ONTC) of the TIF District is $248,210 • Estimated Market Value of District when redeveloped is $61 .38 million generating $1 ,226,036 of net tax capacity Public Sector Advisors 22 Springsted Captured Tax Increment (Cont' d) • Gatlin Development Company expects to complete the development within three years as follows: — Completed in 2012, taxes payable in 2014: • Walmart, one junior box and 64% of renovated mall — Completed in 2013, taxes payable in 2015: • Six retail spaces, two junior boxes, one restaurant and 100% of renovated mall — Completion in 2014, taxes payable in 2016: • Remaining two restaurant pads The increased market value of $48.73 million ($61 .38M minus $12.65M) is estimated to generate captured tax capacity of $630,464, after reduction for fiscal disparity --------------- Public Sector Advisors 23 p Springsted Captured Tax Increment (Cont' d • Captured net tax capacity (CNTC) of $630,464 generates annual net tax increment of $842,930 beginning in tax year 2016 • When utilizing following tax rates Tax Rate Payable 2010 For parcels located within For parcels located within Taxing Jurisdiction Robbinsdale SD Brooklyn Center SD City of Brooklyn Center 52.41% 52.41% Hennepin County 42.64% 42.64% ISD #281 (Robbinsdale) 28.62% NA ISD #286 (Brooklyn Center) NA 51 .17% Other 8.22% 8.22% Total Tax Rate 131.89% 154.44% Public Sector Advisors 24 Springsted Captured Tax Increment (Cont' d) • Estimated tax increment uses tax rates for payable 2010 (all that was available at the time the TIF Plan was originally prepared) County Auditor will certify original tax capacity rate of District applicable to taxes payable year that matches original net tax capacity, whenever available. - If certification requested prior to June 30, the original tax capacity and tax rate will be for taxes payable in 2011 ; - If certification requested after June 30, the original tax capacity and tax rate will be for taxes payable in 2012. Public sector Advisors E,4,1 Springsted Tax Increment Projections for TIF Plan The estimated total tax increment is $11 ,979,683, as shown below Less: Less: Retained Total Less: Total Annual Total Original Fiscal Captured Annual State Aud. Net Period Net Tax Net Tax Disp. Q Net Tax Gross Tax Deduction Increment Ending Capacity Capacity 35.5239% Capacity Increment 0.360% to Authority 1 12/31/11 248,210 248,210 0 0 0 0 0 12/31/12 248,210 248,210 0 0 0 0 0 12/31/13 256,783 248,210 3,046 5,527 7,290 26 7,264 12/31/14 604,776 248,210 126,666 229,900 303,306 1,092 302,214 12/31/15 1,121,796 248,210 310,332 563,254 754,285 2,715 751,570 12/31/16 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/17 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/18 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/19 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/20 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/21 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/22 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/23 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/24 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/25 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/26 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/27 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 12/31/28 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 $12,022,971 $43,288 $11,979,683 Public Sector Advisors Springsted District Restrictions • At least 90% of increment must be used to finance the costs of correcting conditions that allow designation of a renewal and renovation district. • These costs include but are not limited to: • Acquiring properties containing structurally substandard buildings; • Demolition and rehabilitation of structures; • Clearing of the land, the removal of hazardous substances or remediation necessary to development of the land; • Installation of utilities, roads, sidewalks, and parking facilities for the site; • Allocated administrative expenses of the authority may be included Public Sector advisors Springsted District Restrictions (Cont' d) � Not more than 20°/a of the total revenue derived from tax increments may be expended on activities outside district but within geographic area of the project (Housing Development & Redevelopment Project No. 1 ) - 10% Admin expenditures are included within the 20% • Allows 10% of tax increments for expenditures outside the TIF district but within the Project area (or if after five years following certification) Public Sector Advisors 23 Springsted Housing Development and Redevelopment Project No. 01 Project Areas Tr Public Sector Advisors Map of TIF District and Project Area Springsted nw- 'A Legend C3=fojectire3 Boincary -IF!Parce;s X, Public Sector Advisors Map of TIF District and Project Area Springsted Typical ECosts • Public Improvements (streets, sidewalks, utilities, parking) • Acquisition • Soil Correction • Site Preparation/Demolition • Relocation Financing Fees/Capitalized Interest • Administrative Costs (10%) Public Sector Advisors Springsted Estimated Public Costs shown in TIF Plan Expenditure Budget Land/Building acquisition $2,400,000 Site improvement/prep costs 2,300,000 Parking Facilities Streets and Sidewalks Installation of Public Utilities Loan/Note/Bond Interest Payments Administrative expenses Other Expenditures Bond Issuance Costs — Admin Capitalized Interest payments EDA Identified Public Improvements — Within TIF District EDA Identified Public Improvements — Outside TIF District Total Expenditures 0 0 0 2,926,468 1 ,183,000 15,000 125,000 1 ,882,532 1 .198.000 $1290309000 Public Sector Advisors 31 springsted Estimated Revenues and Bonded Indebtedness • The Authority reserves the right to finance any or all public costs s of the TIF District using -- - pay-as-you-go assistance, — internal funding, — general obligation or revenue debt, or — any other financing mechanism authorized by law including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. • The Authority and City reserve the right to issue such obligations/bonds (includes internal borrowing) in an amount not to exceed $8,700,000 (maximum indebtedness of the TIF District). E { Public Sector Advisors Springsted Anticipated Financings • The Authority anticipates issuing apay-as-you-go note to the Developer to finance $2.3 million of site improvement/prep costs; and • The Authority anticipates borrowing funds from TIF No. 2 to finance $2.4 million of acquisition (authorization provided in TIF resolution) The specifics will be outlined in a Development Agreement (discussed tonight) The projected tax increment generated by the proposed new TIF District is expected to repay the debt service on the pay-as-you-go note and the borrowed funds from TIF No. 2 within the maximum duration of the TIF district Public Sector Advisors ; I Springsted Anticipated Financings (Cont' d) • The Authority reserves the right to spend additional monies generated by the TIF district on EDA approved public improvements within and outside the TIF district boundaries, as permitted under the statute; and • The Authority will consider issuing additional obligations to include general obligation or revenue debt, or internal funding to finance the EDA approved public improvements. Public Sector Advisors 34 � Springsted Estimated Revenues in TIF Plan Revenue Budget Tax Increment Revenue * $11 ,980,000 Investment Earnings Bond Proceeds Loan Proceeds Other Revenues Total Revenues * Net of State Auditor Deduction 50,000 M $1290309000 Public Sector Advisors 35 Springsted Estimated Cash Flow with Debt Service REVENUE EXPENDITURES Annual Calendar Projected Tax Admin Exp Pay-As-You Go Note Payments Projected Interfund Loan Repayments Reimb Other Pooled Exp Surplus/ Year Ending Increment(TI) 10%TI Principal Interest Total P&I Principal Interest Total P&I Indistrict Exp 10%TI (Deficit) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 12/31/2011 0 0 0 0 0 0 0 0 12/31/2012 0 0 0 0 0 0 0 0 12/31/2013 7,264 726 0 6,538 6,538 0 0 0 12/31/2014 302,214 30,221 0 271,993 271,993 0 0 0 12/31/2015 751,570 75,157 335,491 340,922 676,413 0 0 0 12/31/2016 839,895 83,990 391,857 112,080 503,937 0 251,969 (0) 12/31/2017 839,895 83,990 415,721 88,215 503,937 0 251,969 (0) 12/31/2018 839,895 83,990 441,039 62,898 503,937 0 251,969 (0) 12/31/2019 839,895 83,990 467,898 36,039 503,937 0 251,969 (0) 12/31/2020 839,895 83,990 247,994 7,544 255,538 0 0 0 500,367 0 12/31/2021 839,895 83,990 0 0 0 0 0 0 755,905 0 12/31/2022 839,895 83,990 0 516,905 516,905 239,000 0 12/31/2023 839,895 83,990 0 556,243 556,243 199,662 0 . .......................... ................................................................................. .......................... ............................................................................................................ 12/31/2024 839,895 83,990 381,390 174,852 556,243 199,662 0 12/31/2025 839,895 83,990 475,498 80,744 556,243 199,662 0 12/31/2026 839,895 83,990 494,518 61,724 556,243 199,662 0 12/31/2027 839,895 83,990 514,299 41,944 556,243 199,662 0 12/31/2028 839,895 83,990 534,294 21,372 555,666 199,662 577 11,979,683 1,197,974 2,300,000 926,228 3,226,228 2,400,000 1,453,784 3,853,784 2,503,146 1,197,974 (2)Projected Tax Increment revenue is net of State Auditor deduction of 0.36% (3)Administrative Expenditure is 10%of annual revenue in column(2) (4),(5),(6)Pay As You Go Note Payments represent payments on principal amount of$2.3M accruing interest at 6%,unpaid interest accrues without interest Available increment to service pay-go is 90%in the first 3 years(2013-2015),60%thereafter until retired (7),(8),(9)-Anticipated repayment to City/Authority for interund loan of$2,400,000 for land acquisition,assumed interest rate is 4%accruing from 12/31/2011 (10)The TIF Plan authorizes an approximate$1.831M of additional indistrict expenditures,amount shown includes interest repayment of$671,455 (11)Pooled Expenditure is delayed until indistrict expenditures are complete,to total 10%of total tax increment(TI)in column(2) (12)The annual surplus/(deficit)subtracts totals in columns(3), (6), (9),(10)and(11)from the TI Revenue in column(2) If expenditures in col.(10)&(11)do not occur,but the projected revenue in col.(2)and debt of$2.3 M and$2.4 M each occur as projected,the district could close in year underlined(2023),5 years prior to statutory decertification.The available funds in the district would retire the pay-as-you-go note and repay the Interfund Loan early. Public Sector Advisors Springsted Municipal Findings (But For) • The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. — The proposed development consists of approximately 515,000 s.f. of retail uses constructed by the Developer, Gatlin Development Company. — The Developer has indicated they will begin construction of the proposed project only if the Authority can provide public assistance, due to extensive redevelopment costs and the speculative nature of the retail. Public Sector Advisors 37 Springsted Municipal Findings (Increased Market Value) • The increased market value of the site that could reasonably be expected to occur without the use of tax increment ($0) would be less than the increase in market value estimated to result from the proposed development ($48.73M) after subtracting the present value of the projected tax increments ($7.34M) for the maximum duration of the TIF District permitted by the TIF Plan ($41 .39M). - Detail follows. Public Sector Advisors 38 Springsted Municipal Findings (Increased Market Value) Assumptions Present Value Date 07/30/11 P.V. Rate-Gross T.1. 5.00% Increase in EMV With TIF District $48,731,797 Less: P.V of Gross Tax Increment 7,342,481 Subtotal $41,389,316 Less: Increase in EMV Without TIF 0 Difference $41,389,316 Annual Present Gross Tax Value Q Year Increment 5.00% 1 2013 7,290 6,558 2 2014 303,306 259,850 3 2015 754,285 615,443 4 2016 842,930 655,020 5 2017 842,930 623,829 6 2018 842,930 594,123 7 2019 842,930 565,831 8 2020 842,930 538,887 9 2021 842,930 513,225 10 2022 842,930 488,786 11 2023 842,930 465,511 12 2024 842,930 443,343 13 2025 842,930 422,232 14 2026 842,930 402,126 15 2027 842,930 382,977 16 2028 842,930 364,740 $12,022,971 $7,342,481 Public Sector Advisors 39 Springsted Municipal Findings Cont d • The TIF Plan conforms to general plans for development of the City as a whole. — The City Planning Commission has determined that the development proposed in the TIF Plan conforms to the City p p p Y � comprehensive plan. The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for redevelopment of the TIF District area by private enterprise. — The anticipated redevelopment projected by the Developer includes a mix of retail uses and substantial site improvements consistent with the City's design goals. Public Sector Advisors 40 Springsted Hypothetical Tax Impact (1) Taxable net tax capacity=total net tax capacity-captured TIF-fiscal disparity contribution,if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 5.32%or 6.23%of the total tax rate. Public Sector Advisors Springsted Without Project or TIF District With Project and TIF District Projected Hypothetical 2009/2010 2009/2010 Retained New Hypothetical Hypothetical Tax Generated Taxable 2009/2010 Taxable Captured Taxable Adjusted Decrease In by Retained Taxing Net Tax Local Net Tax Net Tax Net Tax Local Local Captured Jurisdiction Capacity(1) Tax Rate Capacity(1) + Capacity = Capacity Tax Rate(') Tax Rate(') N.T.C. (') City of Brooklyn Center 17,960,128 52.412% 17,960,128 $630,464 18,590,592 50.635% 1.777% 319,233 Hennepin County 1,439,645,193 42.640% 1,439,645,193 $630,464 1,440,275,657 42.621% 0.019% 268,712 ISD#281 (Robbinsdale) 88,612,938 28.621% 88,612,938 $579,920 89,192,858 28.435% 0.186% 164,900 ISD#286(Brooklyn Center) 5,691,835 51.173% 5,691,835 $50,544 5,742,379 50.723% 0.450% 25,637 Other(2) --- 8.219% --- $630,464 --- 8.219% --- --- Totals ISD#281 131.892% 129.910% 1.982% ISD#286 154.444% 152.197% 2.247% * Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above,the result would be a lower local tax rate(see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case,the total local tax rate would decrease by 1.982%to 2.247%(see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity=total net tax capacity-captured TIF-fiscal disparity contribution,if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 5.32%or 6.23%of the total tax rate. Public Sector Advisors Springsted I I Fiscal an d Economic Implications • The TIF Plan needs to include a description of the rp obable impact of the district on city-provided services such as police and fire protection, public infrastructure, and the impact of any general obligation tax increment bonds — . — City does not expect to have significant impact to city provided services such as police and fire protection resulting from the establishment of the TIF district and the eventual redevelopment of the project site. — City expects to incur public infrastructure costs related to the project and fund those costs directly from the TIF district revenues. — City may consider issuing general obligation tax increment revenue bonds to assist in financing a portion of the public costs, of no more than $2 million, which therefore would not impact the City's future ability to issue other debt for general fund. Public Sector Advisors 42 Springsted Fiscal and Economic Implications (Cont' d) • Total tax increment generated over the life of the district is estimated to be $12,022,971 (before State Auditor deduction) • Amount of tax increments over the life of the district that would be attributable to each taxing entity assuming their local tax rate remained the same - - $362,299 estimated for Brooklyn Center school district - $2,371 ,743 estimated for Robbinsdale school district - $3,835,345 estimated for Hennepin county - $4,714,309 estimated for City of Brooklyn Center • The Authority/City believe the amounts detailed above would not be generated since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. Public Sector Advisors 43 �� Springsted Questions Jenny Wolfe, Senior Project Manager 651 -223-3085 i Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul , MN 55101 -2887 Public Sector Advisors 44 Springsted Hennepin County Taxpayer Services A-600 Government Center www.hennepin.us Minneapolis MN 55487-0060 March 23, 2011 Thomas Denaway Analyst Springsted 380 Jackson Street Suite 300 St. Paul,'MN 55101-2887 Attn: Thomas Denaway Re: Brooklyn Center Renewal and Renovation TI District(Brookdale Shopping Center) Dear Mr. Denaway: Enclosed is a report from David Hough, Hennepin County Deputy Administrator, to the Hennepin County Board of Commissioners, concerning the proposed Brooklyn Center Renewal and Renovation TIF District. Please arrange to have the report entered into the record of the public hearing of the Brooklyn Center City Council on Monday, March 28, 2011, to reflect the input of Hennepin County, as provided by Minnesota Statutes, Section 469.175, Subd. 2. If you have any questions about this information, please call me at 612-348-5475 or email mattaau hq_lin(c-co.hennepin.mri.us Sincerel , c Matt Laughlin, Sr. Administrative Assistant Special Property Tax Projects, Property Tax Division Cc Gary Eitel, City of Brooklyn Center 6301 Shingle Creek Parkway, Brooklyn Center;MN 55430 An Equal Opportunity Employer Recycled Paper Hennepin County Memo Date: March 22, 2011 To Board of County Commissioners t ' From: David J. Hough, Deputy County AcTm- !PiMrator Subject: Brooklyn Center, Renewal and Renovation TIF District (Brookdale Shopping Center) Proposal: Public Hearing: Monday, March 28, 2011 Brooklyn Center has proposed the creation of the Brookdale Renewal and Renovation Tax Increment Financing District. The site of the proposed TIF District is 60 acres on 8 parcels bordered by County Road 10 to the north, Highway 100 to the east and south, and Xerxes Avenue N to the west, located directly on the current Brookdale Shopping Center site. The parcels included within the TIF District are 02-118-21-32-0009, 02-118-21-32-0010, 02-118-21- 32-0011, 02-118-21-32-0014, 02-118-21-32-0017, 02-118-21-23-0021, 02-118-21-23-0023, and 02-118-21-31-0055. Gatlin Development Company expects the full build out to take 3 years and construction will take place in the following order: Phase 1, Walmart and 40,923 s.f. of retail and one junior anchor store of 57,671 s.f. expected to be-complete in 2012. Phase 2, the renovation of 130,355 s.f. in the mall, 12,705 s.f. of retail,two junior anchor stores of 64,653 s.f. and 24,598 s.f. of restaurant expected to be complete in 2013. Phase 3, the remaining two restaurant pads of 17,251 s.f. . The entire project is planned for completion in 2014. Use of Tax Increment: The TIF District is projected to generate$12,230,000 of tax increment. Additional revenue will come from interest on invested funds($120,000) =$12,350,000. These funds will be used for land and building acquisition and administrative expenses. County Road Costs: According to Jim Grube, the Hennepin County Transportation staff is aware of the plans for this site and is currently reviewing the preliminary plat documents. Some roadway improvements have been implemented on CSAH-10 (Bass Lake Road) in preparation for this redevelopment. A'traffiic impact study prepared for the city by Kimley-Horn and Associates, dated January 20, 2011, reports the development will generate approximately 400 a.m. and 2,300 p.m. peak hour vehicle trips when the project is completed in 2012. This volume of traffic is estimated to be fewer trips than the old Brookdale Mall generated when it was fully occupied. The study further reports all county roadway intersections will operate at a Level' of Service C or better over the long-term 20-year time horizon. This level of operation would meet or exceed the county policy requiring a Level of Service D or better. The TIF proposal anticipates expenditure of some TIF monies on infrastructure improvements such as internal parking and roadway construction. These items will help maintain the adequate operation of the traffic signals serving the adjacent CSAH 10 corridor. No additional improvements are anticipated to be needed to the county roadway system to support the proposed redevelopment. SUMMARY: The TIF Plan states that extensive redevelopment costs including site remediation and environmental contamination along with extensive street and landscaping costs required by the City makes it infeasible for the project to proceed without TIF assistance. This TIF District satisfies the preference of the Hennepin County Board of Commissioners for use of tax increment financing, as identified in Resolution 92-10-017R1 adopted 10/27/92, because TIF is a financing tool of last resort. A copy of this report will be sent to the Brooklyn Center City Council with a request that it be entered into the public record of the public hearing to be held on Monday, March 28, 2011, to reflect the county's position on this proposal. RevuBrooklynCenterBrookdale3282011 III HINSHAW & CULBERTSON LLP ATTORNEYS AT LAW 333 South Seventh Street Suite 2000 March 28,2011 Minneapolis,MN 55402-2431 612-333-3434 VIA E-MAIL AND 612-334-8888(fax) HAND-DELIVERY www.hinshawlaw.com FILE NO.64444-879479 Mr. Curt Boganey Charles L. Lefevere, Esq. City Manager City Attorney City of Brooklyn Center City of Brooklyn Center 6301 Shingle Creek Parkway c/o Kennedy&Graven Chartered Brooklyn Center,Minnesota 55430-2199 200 S. Sixth Street, Suite#470 Minneapolis,Minnesota 55402-1458 Mr. Gary Eitel Director of Business and Development City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center,Minnesota 55430-2199 Re: Proposed Redevelopment of Brookdale Center by Gatlin Development Company, Inc. Gentlemen: As you know, our firm represents " Sears Roebuck & Co, Sears with respect to its y � ("Sears") P interest in the above-referenced matter. This letter is written at the request, and on behalf, of Sears. Sears was disappointed to learn earlier today that, despite your assurances at our meeting on March 22 that no aspect of the proposed redevelopment of Brookdale Center would be brought before the City Council prior to its April 11 meeting, City Staff is bringing forward to the City Council at tonight's meeting the Tax Increment package for the proposed redevelopment. While Sears has worked in good faith to reach an agreement with the City, the Applicant real estate developer and Mall owner in order to enable Sears to grant its required consent to the redevelopment,proposed no such agreement has been reached and Sears' consent p p 121278781v1 64444 Arizona California Florida Illinois Indiana Massachusetts Minnesota Missouri New York Oregon Rhode Island Wisconsin Mr. Curt Boganey Mr. Gary Eitel Charles L. Lefevere, Esq. March 28,2011 Page 2 has not been provided. As a result, unless and until such agreement is reached and Sears provides its consent, Sears must continue its objections to the proposed redevelopment.' Sears also specifically objects to the Tax Increment package for the proposed redevelopment. Sears has an interest in the property from which the increment will be captured and which gives rise to the City's $5 million payment. As a result, Sears has an undivided interest in that payment and objects to the use of the proceeds of that payment for purposes that it does not approve and which do not benefit Sears. Moreover, the $5 million City payment is nothing more than a subsidy by the City for one private business (Walmart) to the detriment of another(Sears). It is wholly inappropriate for the City to use taxpayer funds for such an anti-competitive purpose. The proposed redevelopment of Brookdale Center contemplates demolition of approximately 750,000 square feet of the Mall,including the former J.C. Penney's,Mervyns and Macys stores, and replacing it with only a 150,000 square foot building that may be used as a Walmart store. While the Walmart store, itself, may be speculative,2 the real estate developer is not committing to building any more retail space ever. By approving the proposed redevelopment, the City Council will ensure the net loss of at least 600,000 square feet of existing retail space at Brookdale Center. The proposed redevelopment of Brookdale Center denies Sears the connection to the 750,000 square foot Mall that is guaranteed by the City under the existing Brookdale Center PUD,as well as the other guaranties afforded by the existing PUD,including access to the Sears' site from all four sides of Brookdale Center, ring road access, parking and visibility. Moreover, the proposed redevelopment of Brookdale Center isolates Sears' buildings in a remote and secluded corner of Brookdale Center. If approved by the City Council, the proposed redevelopment of Brookdale Center may have the effect of closing Sears' two stores. As a result, for the unsubstantiated opportunity to bring a 150,000 square foot Walmart store to Brookdale Center, if the City Council approves the real estate developer's request, the City Council will eliminate 750,000 square feet of existing retail space and may eliminate another 200,000 square feet of Sears' retail space. Surely, this net loss of 800,000 square feet of retail space, and trading one operating business(Sears)for the possibility of another(Walmart), cannot be justified on any rational basis. Nor can the $5 million subsidy by the City to benefit one private business(Walmart)to the detriment of another(Sears)be justified in any manner. 1 We previously wrote to you regarding the proposed redevelopment of Brookdale Center by real estate developer Gatlin Development Company, Inc. in letters dated February 17, 2011,March ',2011,March 14,2011 and March 22, 2011. Copies of those letters are incorporated by reference. To date, Sears has received no written response from City Staff to any of the letters. 2 According to City Staff and files, the real estate developer has not provided copies of any agreements evidencing its right to purchase the Mall or to have Walmart operate the proposed 150,000 square foot building as a Walmart store. 121278781v1 64444 Mr. Curt Boganey Mr. Gary Eitel Charles L. Lefevere, Esq. March 28,2011 Page 3 Sears has worked diligently with City Staff to obtain information on the proposed redevelopment of Brookdale Center and offer constructive suggestions to protect the City and Sears and improve the proposed redevelopment. For example,the City Attorney asked that Sears submit proposed conditions for inclusion in the Resolution Approving the PUD Amendment Application should it be approved by the Planning Commission. As an attachment to our March 1, 2011 letter to you, we submitted those Conditions. None of the proposed Conditions were included in the Resolution recommended by City Staff to the Planning Commission. At the March 10, 2011 Planning Commission meeting, City Staff never even raised the proposed Conditions. On March 22, 2011, Sears met with City Staff and representatives from the Applicant real estate developer and Mall owner to discuss revised Conditions of Sears' approval. A copy of those revised Conditions is enclosed herewith. At that meeting, City Staff objected only to Conditions D 4 and E 1. Yet, none of the Conditions to which the City did not object have been brought by City Staff to the attention of the City Council for tonight's meeting. Sears has been consistently asking the City to carefully consider the proposed redevelopment in order to allow the following to occur: • provide Sears and the public with an opportunity to obtain all the documents and information submitted in support of the proposed redevelopment in order to be able to review and respond in a timely, complete, and responsible fashion and to allow Sears to determine whether to provide its consent, which is required under the PUD Ordinance and 1999 Declaration • provide Sears, the Mall owner, the Applicant real estate developer, and the City sufficient time to work through design issues to determine if a mutually agreeable plan can be agreed upon • ensure that the decisions on the proposed redevelopment be coordinated and made consistent with each other • ensure that all issues are addressed properly in a comprehensive Development Agreement between the City, Mall owner, Applicant real estate developer, and Sears regarding all material components of the redevelopment of the Brookdale Center,which agreement will be presented to the City Council for its approval For the foregoing reasons, Sears again respectfully requests: 121278781v1 64444 Mr. Curt Boganey Mr. Gary Eitel Charles L. Lefevere, Esq. March 28,2011 Page 4 • a delay in any action on the proposed redevelopment so that all pending issues and related applications, as well as a comprehensive Development Agreement, can be identified, addressed, resolved and acted upon in a unified manner at one time • that City Staff be directed to include Sears' proposed Conditions of approval in any proposed Resolution approving any aspect of the proposed redevelopment presented to the City Council and, as to any Conditions not included,City Staff be directed to provide the City Council with an explanation for their exclusion • that the City Staff be directed to comply with all requirements of the 1999 Declaration and the City's Zoning Ordinance in responding to and recommending actions with respect to the proposed redevelopment Finally, we request that a copy of this letter be given to the Mayor and each of the Councilmembers and be included in the official Minutes of the Council meeting. Very trul yours, IN CULBERTSON LLP otm 61 -334-2675 Irotman @hinshawlaw.com LJR/rep Enclosure(3/22/11 Revised Conditions) cc: (via e-mail; w/enclosure): Ms. Sherry Devoe Mr. Ron Rozanski Elizabeth Williams, Esq. Thomas J. Radio,Esq. Thomas P. Kane, Esq. Mr. Frank Gatlin Chad Williard,Esq. , Thomas Bray, Esq. Peter Clark,Esq, 1212787810 64444 FOR DISCUSSION PURPOSES ONLY Revised Conditions Of Approval Requested By Searsl (March 22,2011) A. Alterations to Proposed Site Plan 1. Applicant shall demolish the remaining portion of the Mall (approximately 4,000 square feet) that is shown on the Site Plan to be attached to the East side of the Sears Department Store and restore the Sears Department Store exterior to a condition compatible to the proposed redevelopment. 2. Applicant shall construct a new prominent exterior entrance and related improvements, including signage, an outdoor patio/seating area and sidewalks from the Sears Department Store ep S o e to the proposed Walmart parking lot, to replace. the existing entrance from the Sears Department Store to the Mall. 3. Applicant shall reduce by at least fifty percent (50%) that portion of the proposed "N" building lying nearest the proposed Walmart parking lot to improve visibility to the Sears Department Store, 4. Applicant shall either: (a) demolish the connection/corridor between the Sears Department Store and Applicant's Food Court Building, and shall rebuild and improve the areas consistent with the development's other improvements, including the Sears Department Store fagade, and shall add a vehicular drive, improved entrance and a pedestrian walkway between the Sears Department Store and the Applicant's property, or (b) come to a satisfactory agreement with Sears regarding the encroachment of the Food Court Building onto the Sears property. B. Improvements to Sears Property to Mirror Those to Proposed Redevelopment 1. Applicant shall demolish and remove the loading dock screen wall and foundation, then patch and restore the disturbed pavement and provide Sears with an appropriate easement to access Sears'loading docks. 2. Applicant shall loop the water main(s) serving the Sears buildings with the remainder of the site's water mains. Sears' requested Conditions of Approval are subject to modification by Sears upon further review of documents submitted or to be submitted by Applicant or prepared or to be prepared by the City. Subject to that review,Sears reserves the right to supplement or modify these requested Conditions of Approval. All work described in these Conditions shall be performed by Applicant at Applicant's sole cost and expense. 121278336v2 0879479 64444 FOR DISCUSSION PURPOSES ONLY 3. Applicant shall cause Xcel Energy to replace Sears'private electric system with a new electric system to be maintained by Xcel; this includes a new transformer on a pad and the lines and hook up to Sears'gear in its electric room. 4. Applicant shall construct improvements to the Xerxes Avenue and 55th Avenue entrance consistent in quantity and quality as that which is proposed to be installed on Applicant's property along County Road 10. 5. Applicant shall provide new landscaping on the Sears parcel consistent in quantity and quality as that installed on Applicant's property. C. Construction Protections 1. All work performed by Applicant on the Sears property shall be 'done in accordance with plans and specifications approved by Sears, in accordance with applicable laws, in a good and workmanlike manner and on a lien-free basis. 2. During construction, Applicant shall properly protect Sears' operations and buildings.gs. Dunng this period Applicant shall ensure access to public roads, take all steps to minimize disruption, not block or restrict access to building entrances and loading docks, provide signage to let customers know that Sears will remain open during construction and directional signage to Sears during construction, p rovide evidence of appropriate insurance and financin g, p rovide appropriate indemnification for work done on Sears' property, not permit any utility service interruption, and be responsible for any utility reconnections. 3. Applicant shall provide information in all press releases regarding the proposed redevelopment that Sears will remain open and be an integral part of the redevelopment. D. Operating Protections 1. Applicant shall grant Sears a right to maintain signage in the second position on all pylon signs on Applicant's property. 2. The PUD Amendment and related plat and site plan shall provide Sears with full and complete access to all driveways,ring roads, sidewalks,parking, and all other public amenities in the new development. ment.p 3. Applicant shall provide easements over its property for drainage, including sheet electric drainage, and all utilities benefiting the Sears parcel, to include' gas, , telephone and water. 4. Applicant shall provide permanent signage on its property providing directions to the Sears buildings. 2 121278336x2 0879479 64444 FOR DISCUSSION PURPOSES ONLY E. General 1. Applicant shall satisfy all conditions recommended by City staff in their reports, including those by Business and Development Director Gary Eitel, dated February 16, 2011, and by Director of Public Works/City Engineer Steve Lillehaug, and Bruce Johnson, Engineering Supervisor, dated February 3, March 1 and March 15,2011. 2. Applicant shall demonstrate compliance with the City's parking ratio requirement of 4.5 spaces per one thousand square feet of gross leaseable area on Applicant's own property. 3. Applicant shall provide Sears with copies of all "as builts" on Applicant's property to assist Sears in the review of the utility easements. 4. Applicant and Sears shall execute and deliver an agreement addressing the satisfaction of the conditions to the City's approval that affect or benefit Sears and containing the consent of Sears to the PUD Amendment, the preliminary plat,the site plan, and all other required governmental approvals. 3 121278336v2 0879479 64444 COUNCIL ITEM MEMORANDUM DATE: March 23, 2011 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business and Development SUBJECT: Resolution Approving Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Establishing a Tax Increment Financing District Therein and Approving a Tax Increment Financing Plan Therefor Recommendation: It is recommended that the following the public hearing that the City Council consider adoption/approval of the Resolution Approving Modification to the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Establishing a Tax Increment Financing District Therein and Approving a Tax Increment Financing Plan Therefor ( Tax Increment District No. 5) Background: • On January 24, 2011, the City Council received an update from Gatlin Development regarding the proposed redevelopment of portions of the Brookdale Mall to be known as Shingle Creek Crossing and information from the City's financial consultant and staff relating to financial assistance to facilitate this commercial redevelopment. The consensus of the City Council was to move forward with the framework as presented. Attached is a copy of the February 1, 2011 letter to the developer, which outlines the Council direction/consensus to proceed with the framework of the proposed economic development assistance package and the January 24 Council minutes on this item. On February 14, 2011, the City Council adopted a resolution which authorized the setting of a public hearing for March 28, 2011 to consider the creation of a Renewal and Renovation Tax Increment District for the eight Brookdale Mall parcels proposed to be demolished/redeveloped as part of the Shingle Creek Crossing PUD. On February 28, 2011, the City Council's work session included a presentation by the City's fmancial consultant on the elements of this proposed Renewal and Renovation District and the details associated with the Shingle Creek Crossing Development. Attached for your reference is a copy of that power point presentation and February 28th Council minutes on this item. • Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust COUNCIL ITEM MEMORANDUM On March 17, 2011, the Planning Commission adopted Planning Commission Resolution No. 2011 -04, finding that the Shingle Creek Crossing PUD and the proposed Tax Increment Financing District No. 5 are consistent with the City's Comprehensive Plan. This draft plan for Tax Increment District No. 5 was mailed to Hennepin County, the Brooklyn Center School District and the Robbinsdale School District as required by the TIF regulations. Additionally, public notice has been published in the City's official newspaper. As of the date of this memorandum, the City has not received any comments from either the County or School Districts on the proposed creation of this tax increment district. Establishing Tax Increment District No. 5 The attached Tax Increment Financing Plan provides for the creation of a 16 year Renewal and Renovation District for the following eight Brookdale parcels included in the demolition and redevelopment plans for the Shingle Creek Crossing Development. -The Mall and in -line tenants parcel. -The Mervyn's parcel. -The Penney's and Penney's auto parcels. -The Macy's parcel and eastern parking lot. -The parcel for the vacant lot (previously DQ Chill and Grill). -A small outlot for the Northway entrance • The plan has been revised to reflect minor changes to the PUD relating to building sizes and a change from the use of a G.O. Tax Increment Bond to a Pay -As -You- Go promissory note. A memorandum identifying these minor revisions to the draft plan has been attached to the final Tax Increment Plana A PowerPoint presentation will be provided at the public hearing which will include the following components of the plan: - The statutory authority and requirements associated with establishing a Renewal and Renovation Tax Increment District. - The building inspections and determinations of structurally substandard conditions of the Mall and JC Penney Building to qualify for the creation of the district. - The proposed square footage, projected commercial valuations, projected construction schedule, and estimate values of the tax increment that could be generated from the Shingle Creek Crossing PUD. - Eligible Tax Increment expenditures, restrictions on the use of Tax Increment within and outside of the TIF District, a projected/estimate budget and financing mechanisms. - Fiscal and Economic Implications, including a hypothetical tax impact. - The municipal findings relating to the proposed project proceeding with the development should tax increment not be available, the increase in market value as a result of the development, the development's conformance with the City's Comprehensive Plan, and consistency with the City's goals. • Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust COUNCIL ITEM MEMORANDUM Attached is a Resolution provided by the City Attorney which includes the necessary findings by the City Council in establishing this Renewal and Renovation District and approves a policy on Inter -fund Loans and Advances identified as financing mechanisms for this Tax Increment District. Budget Issues: The City and all tax jurisdictions will retain the 2011 base value of the eight Brookdale parcels during the life of the district and will receive the full property valuations upon the decertification of the District. This redevelopment project has the potential to promote significant private investment into the City's Central Commerce Area and expand the city commercial tax base. The financial effects associated with the creation of a new tax increment district are included on Exhibit VI of the attached Tax Increment Financing Plan. Council Goals: Strategic: 2. We will aggressively proceed with implementation of City's redevelopment plans Ongoing: - 2. We will ensure the financial stability of the City. • • Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust Member introduced the following resolution and moved • its adoption: RESOLUTION NO. RESOLUTION APPROVING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO. 1 AND ESTABLISHING A TAX INCREMENT FINANCING DISTRICT THEREIN AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR BE IT RESOLVED by the City Council (the "Council ") of the City of Brooklyn Center, Minnesota (the "City "), as follows: Section 1. Recitals 1.01. It has been proposed that the Economic Development Authority of the City of Brooklyn Center, Minnesota (the "Authority ") modify the Redevelopment Plan for its Housing and Redevelopment Project No. 1(the "Redevelopment Project "); and establish Tax Increment Financing District No. 5 within the Redevelopment Project and adopt the related Tax Increment Financing Plan therefor (collectively, the "Plans "); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047 and Sections 469.174 through 469.1739, as amended; all as reflected in that certain document entitled in part "Modification to Redevelopment Plan for Housing and Redevelopment Project No. 1 and Tax Increment Financing Plan for Tax • Increment Financing District No. 5 (A Renewal and Renovation District) Shingle Creek Crossing Project," dated March 28, 2011, and presented for the Council's consideration. 1.02. The Council has investigated the facts relating to the Plans. 1.03. The City has performed all actions required by law to be performed prior to the adoption and approval of the Plans, including but not limited notice to the County Commissioner representing the area of the County to be included in TIF District No. 5, delivery of the Plans to the County and School Board, a review of the Plans by the Brooklyn Center Planning Commission, and thereon following notice thereof published in the City's s public hearing b the City the t3' the holding of a p c g y ty g P 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 a draft Planned Unit Development and other information supplied by Gatlin Development Company, Inc., a Tennessee corporation (the "Developer ") and a Renewal and Renovation Eligibility Prepared b Alden Associates Architectural Services, have . g t3' Assessme t Pre d P Y heretofore been assembled or prepared by staff or others and submitted to the Council and/or made a part of the City 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 TIF District No. 5 meets the requirements to be a renewal and renovation tax increment financing district, (2) why the assistance satisfies the "but for" test and (3) the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby • RESOLUTION NO. • 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 finds that the boundaries of the Project Area are not being expanded and the Redevelopment Plan is not being modified other than to incorporate the establishment of TIF District No. 5 therein and therefore the Council reaffirms the findings and determinations originally made in connection with the establishment of the Redevelopment Project area and the adoption of the Redevelopment Plan therefor. 2.02. The City Council hereby finds that TIF District No. 5 is in the public interest and is a "renewal and renovation district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 10a, because, as set forth _in the Reports, TIF District No. 5 consists of a project or portions of a project within which the following conditions, reasonably distributed throughout TIF District No. 5, exist: (1) parcels consisting of at least 70% of the area of TIF District No. 5 are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures; and (2) 20% of the buildings, not including outbuildings, are structurally substandard, as defined in the statute, to a degree requiring substantial renovation or clearance and (iii) 30% of the other buildings • have other conditions that would require substantial renovation or clearance to eliminate. TIF District No. 5 consists of 8 parcels, all of which are "occupied" as defined in Minnesota Statutes, Section 469.174, Subd. 10(a)(1), in that at least 15% of the area of the parcels is occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures. In addition, there are 4 buildings located in TIF District No. 5, of which the Brookdale Mall building (1 of the 4 which is 25 %) was found to be "structurally substandard" due to significant deficiencies such as structural elements, essential utilities, and fire protection, justifying substantial renovation and the JC Penney building (1 of the remaining 3 which is 33 %) was found to require "substantial renovation or clearance ", when considering significant health and safety deficiencies and overall obsolescence, rendering the building not suitable for improvement or conversion. 2.03. The City Council hereby makes the following additional findings in connection with TIF District No. 5: (a) The City Council further finds that the proposed development, in the opinion of the City 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 project will occur would not be developed in the reasonably foreseeable future. The Developer has demonstrated that current economic conditions make it unfeasible for • the project to proceed. Extensive redevelopment costs including site RESOLUTION NO. • remediation and environmental contamination along with extensive street and landscaping costs required by the City cannot be supported by the anticipated project revenues, and given the speculative risk of the extensive retail tenanting required. The Developer has represented that it could not proceed with the project without tax increment assistance. (b) The City Council further finds that the Tax Increment Financing 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 Tax Increment Financing Plan will generally compliment and serve to implement policies adopted in the City's comprehensive plan. The retail development contemplated on the property is in accordance with the existing zoning for the property. The Planning Commission has reviewed the Redevelopment Plan, and approved the same as being in conformity with the City's comprehensive plan and the general plan for the development and redevelopment of the City as a whole. • (c) The City Council further finds that the Tax Increment Financing Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of TIF District No. 5 by private enterprise. The specific basis for such finding being: The proposed development to occur within TIF District No. 5 is a commercial development consistent with other retail facilities in the area and is in an area targeted for redevelopment by the City. The development will increase the taxable market valuation of the City, and the available commercial facilities in the City. (d) For purposes of compliance with Minnesota Statutes, Section 469.175, Subdivision 3(2), the City Council hereby finds that the increased market value of the property to be developed within TIF District No. 5 that could reasonably be expected to occur without the use of tax increment financing is $0 or some modest amount based on small scale development that could be possible without assistance, which is less than the increased market value estimated to result from the proposed development (i.e., $48,731,797) after subtracting the present value of the projected tax increments for the maximum duration of TIF District No. 5 (i.e., approximately $7,342,481). In making these findings, the City Council has noted that the property has not been redeveloped for several years and would likely remain so if tax increment financing were not available. Thus, the use of tax increment financing will be a positive net gain to the City, the School District, and the • • RESOLUTION NO. County, and the tax increment assistance does not exceed the benefit which will be derived therefrom. 2.04. The provisions of this Section 2 are hereby incorporated by reference into and made a part of the Tax Increment Financing Plan. 2.05. The Council further finds that the Plans are intended and in the judgment of the Council their effect will be to promote the public purposes and accomplish the objectives specified in the Tax Increment Financing Plan for TIF District No. 5 and the Redevelopment Plan for the Redevelopment Project. Section 3. Approval and Adoption of the Plans-, Policy on Interfund Loans and Advances 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 Finance Director. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. The Business and Development Director is hereby directed to request, in writing, the Hennepin County • Auditor to certify the new TIF District No. 5 and to file the Plans with the Commissioner of Revenue and the Office of the State Auditor. 3.02. The Council hereby approves a policy on interfund loans or advances ( "Loans ") for TIF District No. 5, as follows: (a) The authorized tax increment eligible costs (including without limitation out - of- pocket administrative expenses) payable from the 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 TIF District No. 5. (d) The maximum term of any Loan shall not exceed the lesser of the statutory duration limit of TIF District No. 5 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, TIF bond proceeds or other eligible sources. RESOLUTION NO. • (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 270.75 or 549.09 at the time a Loan, or an art of it is first made s the right of the City Finance Director to specify y p subject to e p fy a J g tY 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 maintain all necessary or applicable data on the Loans. March 28, 2011 Date Mayor ATTEST: City Clerk • The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • • RESOLUTION NO. CITY CLERK'S CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Brooklyn Center, 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 City Council of said City held on March 28, 2011, 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 tax increment and related actions referenced therein with respect to the Economic Development Authority of the City of Brooklyn Center, Minnesota's Housing and Redevelopment Project No. 1 and Tax Increment Financing District No. 5 therein. WITNESS My hand this day of March, 2011. 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Et' _ . �. ;49TH AVEJ. of Cily _ BROOKLYN CENTER . Brooklyn CenterGlS - City of Brooklyn Center A Millennium Community February 1, 2011 Gatlin Development Company Attn: Frank Gatlin 101 S. Main Street Dickson, TN 37055 Re: Gatlin Development Company, Inc. Shingle Creek Crossing ( "SCC ") Redevelopment Public Assistance Request The purpose of this letter is to confirm the understanding reached during our meeting on January 20, 2011. Subject to a public hearing and as otherwise permitted by law, EDA Staff wily negotiate with Gatlin for a development agreement with the EDA, the terms of which will be _ generally consistent with the following: 1. $3.3 Million of "Up Front' Tax Increment Fin ancing. Subject to the City's ability to sell taxable tax increment revenue bonds in a principal amount equal to approximately $2,500,000, the EDA will provide "upfront" TIF to reimburse Gatlin Development Company, Inc. or a new entity to be created by Gatlin for purposes of this Development (the "Developer") for $3.3 million of costs Gatlin actually incurs to pay for TIF eligible expenses to be mutually agreed upon by the EDA and the Developer as necessary to reasonably ensure that the sum of the • eligible expenses will total $3.3 million. The EDA will agree .to disburse the funds to Developer to upon the Developer's providing the EDA with satisfactory evidence that the reimbursable work has been completed and the Developer has completed (i) the day- lighting of Shingle Creek; (ii) street construction/landscaping within the project to achieve a "Town Center" look, consistent with the proposed SCC site plan; (iii) design and construction of the storm water detention and/or retention areas, consistent with the proposed SCC site plan; and (iv) "reskinning" the exterior of the remaining portions of-the existing mall. The EDA will provide this TIF financing without requiring an assessment agreement or increment guaranty from Walmart Parcel. Developer will provide a letter of credit from a bank acceptable to the EDA, in the amount of $2,500,000 (or such amount as is necessary to pay principal and maximum annual interest on the bonds), to assure payment of bonds issued by the EDA for the project. 2. No Public Subsidy to Benefit Wal ma _rt. Notwithstanding anything to the. contrary stated herein, the EDA shall not support any portion whatsoever of the public subsidy contemplated herein being contributed to Walmart with respect to any costs Walmart may incur in connection with its participation in the SCC Redevelopment. Therefore, the Development Agreement will strictly prohibit the Developer from using any portion of the TIF proceeds for costs associated with the development of the Walmart parcel or to otherwise subsidize the Walmart development. 3. Forgivable City Loan The EDA will lend the Developer $1,000,000. The EDA will disburse the loan proceeds to the Developer contemporaneously with the Developer's • 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 www.cityofbrooklyncenter. org closing on the acquisition of the Capmark Parcel: The Development Agreement will strictly • prohibit the Developer from using any portion of the loan proceeds for costs associated with the development of the Walmart parcel or to otherwise subsidize the Walmart development. The loan will bear interest at the rate of 6% per annum and will mature five years from the date the EDA disburses the loan proceeds to the Developer ("Maturity Date "). There will be no principal or interest payments due prior to the Maturity Date. All principal and accrued interest will be due and payable in full on the Maturity Date; - provided,. however, on the Maturity Date, the EDA will forgive amounts due under the terms of the promissory note as follows: (a) The Developer and the EDA will define, in the Development Agreement, the miriimum square foot area of the improvements the Developer will construct within the Project — which the EDA and the Developer agree shall not include any structures existing as of the date of the Capmark Parcel closing that ultimately remain as part of the SCC Redevelopment. (b) If the Developer has completed and secured a of occupancy for all of the agreed upon improvements on or before the Maturity Date, the EDA will forgive all principal and interest due. (c) If the Developer has not completed and secured a certificate of occupancy for all of the agreed upon construction on or before the Maturity Date, the Developer must pay to the EDA, on the Maturity Date, that portion of the principal (plus accrued interest thereon) that is proportional to the square • foot area of the agreed upon improvement for which the Developer has not completed and secured a certificate of occupancy before the Maturity 4 Date. For example, if the Developer and the EDA agree that the Developer is to construct 350,000 square feet of improvements on or before the Maturity Date, and the Developer has completed and secured a certificate of occupancy for 315,000 square feet of improvements as of the Maturity, Date and has not completed and secured a certificate of occupancy of 35,000 square feet (10 %), the EDA would only forgive 90% of the principal and interest due on the EDA loan. The Developer will grant the EDA a mortgage on the development property, exclusive of the Walmart site, to secure its obligation to repay the loan. The EDA will agree in the Development Agreement and the mortgage that the EDA's mortgage is subordinate to any mortgages or liens on the Development property that the Developer has previously granted or thereafter grants to secure the repayment of loans, the proceeds of which the Developer uses to finance hard or soft costs associated with the development of the Project or to secure the performance of the Developer's obligations to Walmart with respect to the performance of the Developer's obligations relating to the development of the Walmart site. 4. Conveyance of the EDA Parcel The Development Agreement will provide that the EDA will sell the EDA Parcel to the Developer for an agreed purchase price to be determined based on the appraisal of the EDA Parcel. Prior to execution of the Development Agreement, • Gatlin will secure an appraisal of the EDA Parcel at Gatlin's expense from an appraiser jointly selected by the EDA and Gatlin. The appraiser's analysis shall be based on an "as is" sale and a closing within 90 days of the date of the appraisal. The EDA will provide seller financing. The • closing will occur after the Developer's acquisition of the Capmark property and the City and the EDA have approved a specific commercial use and site development plan for the EDA site. The Developer will execute a note in favor of the EDA for the amount of the purchase price. The Developer will grant the EDA a mortgage on the EDA Parcel to secure its obligation to repay the note. The note will be t ° mature on the date five bear interest at the rate of 6 /o per annum and will ma P years from the closing date. The EDA will forgive the principal and interest due under the note, cancel the note and release the mortgage if, on or before the maturity date, if the property currently occupied by Midas Muffler is developed in accordance with a development plan approved by the City and the EDA as a part of the planned unit development for the project, and a certificate of occupancy has been issued for the development. After you have had the opportunity to review this letter, please call me to discuss any questions, comments or concerns you may have. Cornelius og City Manager cc: Jennifer Wolfe, Springsted Incorporated Chad Williard, Gatlin Development Company (cwilliardAgatlindc.com) Gary Eitel, Business and Development • City Council MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER_ IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA WORK SESSION JANUARY 24, 2011 CITY HALL — COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council/Economic Development Authority (EDA) met in Work Session called to order by Mayor/President Tim Willson at 8:25 p.m. ROLL CALL Mayor/President Tim Willson and Councilmembers /Commissioners Carol Kleven, Kay Lasman, Tim Roche, and'Dan Ryan. Also present were City Manager Curt Boganey, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building & Community Standards Vickie Schleuning, Police Chief Kevin Benner, City Attorney Charlie LeFevere, and Carla Wirth, Timesaver Off Site Secretarial, Inc. STERLING SQUARE RENTAL LICENSE REVOCATION UPDATE City Manager Curt Boganey introduced the item, discussed the history, and requested Council direction. Mayor/President Willson stated the property owner of Sterling Square had been adamant about revocation reconsideration; however, there is nothing in staff's report that would incline him to reconsider revocation at this point. Councilmember /Commissioner Ryan stated he had found a full one -year revocation to be excessive in this case and would support reconsideration of the revocation. He suggested revocation guidelines be established based on the term taxes and utilities remain in delinquency to assure consistency and avoid arbitrary action. The majority consensus of the- City Council was to not reconsider revocation of the Sterling Square Apartments rental license JOINT MEETING WITH COMMISSIONS Following discussion, the consensus of the City Council was to direct staff to schedule a joint meeting with Commissions on April 6, 2011, 6 -8 p.m., and to follow the same agenda format. SHINGLE CREEK CROSSING 01/24/11 -1- Mr. Boganey introduced the item, discussed the history, and explained the three considerations • before the Council related to Shingle Creek Crossing to receive a project update by Mr. Gatlin, an overview on the potential for financial assistance by Ms. Wolfe, and update by staff regarding its negotiation with the developer. Staff would then request Council provide comment and direction. Frank Gatlin, Gatlin Development, thanked the Council for the opportunity to present their plans .and for the great work of City staff. He described his work on this project for the past two years to acquire the property and reach agreement with Walmart to provide the- "bones and structure" for a great redevelopment. Mr.- Gatlin reviewed his development experience, past projects, and described his vision for Shingle Creek Crossing to be a great success, stating it will be his "crown jewel " Mr. Gatlin displayed exterior site elevations, noting the site has great location with visibility from all directions. He reviewed his investigation to uncover every possible problem that could come forward with this project and 'intent to make Shingle Creek a focal point and desirable pedestrian- friendly area with restaurants alongside. Mr. Gatlin then addressed financing, noting this is the first time in 15 years he has requested assistance, which he does not like to do, and has worked with staff to develop the minimum request that will work. It was clarified that Walmart is not requesting any assistance. He advised that Gatlin Development is one of the most successful developers in the country and never failed in a development. However, he will have difficulty attracting desired tenants until the project moves forward and Brookdale Mall is demolished. Mr. Gatlin stated construction will start as soon as possible, once approved, noting this will be the first project out of ground in • the last three years. He assured the Council this will be a beautiful development, one the City can be proud of,. and a catalyst for rebranding the City and spurring on development of neighboring parcels. Jenny Wolfe, Senior Project Manager with Springsted Incorporated, the City's financial consultant, presented the Shingle Creek. Crossing financing gap analysis that was conducted in reaction to a request for $10 million in TIF assistance. It was noted the project's cost was over $100 million and the developer would cover $51 million. Ms. Wolfe presented the projected rate of return and conclusion the proposed project would need some level of public assistance to proceed given the speculative nature of the retail and marginal return without assistance. The proposed TIF district supports $7 million of assistance, resulting in a return of 11.95 %, which exceeds 11.5 % as a reasonable minimum return. Mr. Boganey noted the projections are based on assumptions that everything will fall into place within three years; however, that rarely occurs: The assistance is intended to share some of the risk that everything may not be built out as planned in three years or to the level assumed and anticipated. It will be used to share some upfront costs for items (daylighting of Shingle Creek, landscape, streetscape, creating a Town Square concept, etc.) the City wants to assure are completed at the beginning of the project, not later when the project starts to make revenue. Director of Business an d Development Gary Eitel presented the three components making up.the framework for a financial assistance package as follows: 1. EDA provides $3.3 million for , public 'purpose costs to ensure the timely redevelopment of the site and completion of the 01/24/11 -2- features prioritized by the EDA; 2. A collateralized $1 million forgivable loan having a term of • five years with an interest rate of 6% (City's CIP assessment rate). The loan amount will be available upon the execution of the Tax Increment Development Agreement which will limit the use of these funds to eligible public purpose costs and acquisitions, exclusive of Walmart related costs; and, 3. The EDA's lot will be included in the development of Shingle Creek Crossing PUD using the formula detailed in staffs report. Mr. Eitel listed the benefits the City would receive for an investment of $4.5 million that would create new development energy as far as the 57` and Logan EDA site. He explained the details of this framework will be negotiated in a development agreement through the City Attorney and conclude with the creation of a new TIF district and implementation. Mayor/President Willson stated that he is not shy about using TIF but believed the City needed to be prudent to assure increment is available to pay back TIF. He welcomed the opportunity to work with Mr. Gatlin to bring this project into Brooklyn Center.. Mayor /President. Willson stated he supports proceeding with the framework as outlined by Mr. Eitel and getting into the detail of the development agreement. Mr. Boganey stated if the Council reaches consensus regarding the general framework, staff will develop a specific development agreement that the Council/EDA will consider at a future meeting. Councilmember /Commissioner Roche noted that Brookdale Mall is the second oldest enclosed . mall in the country. He stated that Walmart is going under a radical rebranding effort, as is Brooklyn Center and Shingle Creek Crossing will help in that effort. He indicated he supported the terms of the framework and raised several design elements he would like considered including the daylighting of Shingle Creek and iconic building lighting to attract customers. He. also suggested that the 12 stall parking area by Sears be reconfigured. Mr. Gatlin assured the Council they will work diligently with City staff to create the best design possible during the permitting, planning, and approval process that gives the Council the assurances they are looking. He asked the Council to keep in mind that Walmart is only 20 % of this development so there will be many new shops. Mr. Gatlin stated he owns the Macy's building�and described the potential ownership arrangements with the other buildings that would allow flexibility to attract desirable tenants. He presented an option that will be considered to use the building adjacent to Sears to create an interior climate - controlled corridor, a mall component. Councilmember /Commissioner Lasman asked staff to consider measurable performance benchmarks for TIF. Mr. Boganey stated those details will be spelled out in the assistance agreement. He noted the Council has a lot of influence through the PUD process to address details to be included. Councilmember /Commissioner Lasman stated it sounds like Mr. Gatlin is anxious to get started and she would like to see a standards and timeline that identifies dates when things will happen. 01/24/11 -3- Mr. Gatlin gave credit to City staff for developing this TIF concept and $1 million incentivized • forgivable loan. He indicated he supports this plan, which is less than one -half the $10 million he had requested for this $100 million project. Mr. Gatlin estimated that Shingle Creek Crossing will result in producing millions more dollars for the City and this plan gives him incentive to complete the project quickly to meet the thresholds in Phase 1 to receive assistance. Councilmember /Commissioner Ryan stated he appreciates hearing that Walmart will "carry its own freight" because otherwise the community would question giving assistance to the richest company in the world. He stated he appreciates how challenging the market is today and supports the framework that will provide needed capital up front. Councilmember /Commissioner Ryan stated he looks forward to the process moving forward and appreciates the comments from a third party to evaluate the financials. Mr. Gatlin commented on the effort of Walmart to change its image and advised of its generosity in making donations to the community. He stated he is appreciative of the Council's support and will perform if the project is approved. Mr. Gatlin commented on the perfect timing for this project since they intend to open the first store in 2012, the 50 year anniversary of the Brookdale Mall opening. He stated they plan to schedule a ground breaking in May complete with a wrecking ball and big ceremony. He commented on the generosity of Walmart to become involved in the community and stated they will be looking for places to make donations. Councilmember /Commissioner Lasman suggested they consider the Centennial Park bandshell that the Centennial Committee is working to erect. Councilmember /Commissioner Kleven indicated she is excited about this project and appreciates the work of staff and Mr. Gatlin. The consensus of the City Council was to move forward with the framework as presented. ADJOURNMENT Councilmember /Commissioner Lasman moved and Councilmember /Commissioner Ryan seconded adjournment of the City Council/Economic Development Authority Work Session at 9:45 p.m. Motion passed unanimously. 01/24/11 4- STATE OF MINNESOTA) • COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Work Session of the .City Council of the City of Brooklyn Center held on January 24, 2011. 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the City Council adopted said minutes at its February 14, 2011, Regular Session. City Clerk Mayor C i 01/24/11 -5- • Highway 252 corridor except to _work with Mn/DOT. In addition, the federal funding deadline for applications has expired so the next round of funding is next fall. Councilmember /Commissioner Roche stated his support to address the 66 h Avenue interchange, one of the worst intersections in the metropolitan area. The majority consensus of the City Council/E was to delay consideration until June of 2011 and ask: staff to provide information on funding sources and potential impact to other projects planned for 2011. . PRESENTATION OF THE TAX INCREMENT REPORT RELATING TO THE CREATION OF TAX INCREMENT DISTRICT NO.5 (SHINGLE CREEK CROSSING) Mr. Boganey introduced the item and indicated the intent. tonight j' is to provide additional information to the City Council: Jennifer Wolfe, Senior Project Manager with Springsied, Inc., provided a presentation on the . establishment.of Tax Increment Financing (TIF) District No.:5 and explained how it would fund the economic assistance necessary for the redevelopment of the Brookdale Mall property into the Shingle Creek Planned Unit Development (PUD). She advised that the projected tax increment generated by the prop, osed new TIF District is expected to repay the 'debt �ervice general obligation (GO) bond and the borrowed funds from TIF No. , 2 within the`maximum duration • the TIF district. Mr. Boganey reviewed .the wording revision related to this project not having a-significant impact on City services. Ms. Wolfe. and Mr. Boganey answered questions of the City Council/EDA related to the creation of TIF No. 5: It was noted that a Public Hearing on the creation of a Renewal and Renovation District is . scheduled for March 28, 2011. PROGRESS REPORT ON ACHIEVEMENT OF STRATEGIC GOALS Mr. Boganey indicated that the City Council/E had identified strategic goals at its :retreat .a year ago as well as aggressive targeted dates to achieve those. goals. He presented the. report indicating 28 targets were met, 19 targets were not met, and 33 targets are yet to be determined. . Mr. Boganey and the .City Council/E reviewed each of the strategic goals. and discussed targeted goals. The City Council/E agreed with the importance of neighborhood meetings to gain resident input . and. the need to conduct a statistically valid resident survey in 2012 to determine whether several goals had been met. Mr. Boganey noted the census data will. be available shortly and also provide valuable information related to housing ratios. 02/28%11 -2- Springsted Incorporated • 380 Jackson Street, Suite 300 Springsted Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 www.springsted.com MEMORANDUM TO: Gary Eitel, Business and Development Director City of Brooklyn Center FROM: Jennifer Wolfe, Sen for Project Manager DATE: March 23, 2011 SUBJECT: Tax Increment Financing Plan for TIF District No. 5 (Shingle Creek Crossing) The Tax Increment Financing lan for TIF District I Creek in to be adopted b the City • g nct No. 5 (Shingle Crossing) p y ty Council and EDA on March 28 has slight revisions from the draft plan that was distributed to the City /EDA for the work session on February 28, and to the County and School Districts for their review. The revisions are as follows (in order of appearance): ➢ Section II Modification to Redevelopment Plan for Redevelopment Proiect (Page 2) — indicates the plan is available from the City of Brooklyn Center. ➢ Section II.0 Statement of Objectives (Page 3) — an additional paragraph was added stating the specific objectives for the Shingle Creek Crossing Redevelopment. ➢ Section III.E Specific Development Expected to Occur Within the TIF District (Page 5) — the retail square feet and mix of uses was updated to the more recent PUD under consideration. The total retail square feet increased from 500,471 to 514,818. The TIF projections delayed slightly the market value assessed January 2, 2013 for taxes payable in 2014. ➢ Section III.F Findings and Need for Tax Increment Financing (Page 6) -with" the change to the retail square feet and mix of uses, the projected market value reduced slightly. The draft plan anticipated a total market value of $61,803,660 with the final plan for adoption indicating anticipated total market of • Public Sector Advisors Gary Eitel, City of Brooklyn Center Tax Increment Finance Plan for TIF District No. 5 • March 23, 2011 Page 2 $61,376,797. Therefore, the increased market value resulting from redevelopment of the site and present value of tax increments declined slightly as well ➢ Section III.G Estimated Public Costs (Page 7) —the proposed financing assistance to the Developer has changed. The draft plan anticipated the City providing $4.3 million of assistance to the Developer with $2.3 million provided through the issuance of General Obligation tax increment revenue bonds (total size approximately $2.7 million) and the remaining $2 million through an internal loan from TIF No. 2. Subsequently the loan amount from TIF No. 2 was increased to $2.4 million and the GO bond was reduced to net $1.9 million, with a total bond amount of approximately $2.3 million, which included approximately $400,000 for costs of financing to include capitalized interest. City staff has negotiated a transaction that includes a $2.3 million pay -as- you -go note provided to the Developer for site improvement/prep costs and $2.4 million for land /building acquisition through an internal loan from TIF No. 2. This change resulted in a reduction in the capitalized interest amount previously shown in the budget. We continue to include an amount for capitalized interest in case tax increment revenue bonds are issued in the future. A determination to capitalize interest on any debt which determination was not a part of the original TIF plan would require a formal modification of the TIF plan (notice /hearing, etc.). The amount shown as "EDA Identified Public Improvements — Within TIF District" is less than before, • however, the amount is an estimate of project costs, and a portion of the cost is also shown in the interest line item. The result is actually a slight increase from $2,434,000 to $2,503,146. The administration and pooling continue to be 10% of the projected total tax increments. ➢ Section III.H Estimated Sources of Revenue (Page 7) — with the slight reduction in market value and assessed value in the first year, the total projected tax increment revenue declined slightly from $12,230,000 to $11,980,000. The paragraph detailing the anticipated financing reflects the addition of the pay -as- you -go note. ➢ Section 111.1 Estimated Amount of Bonded Indebtedness (Pape 7) — the change in the planned financing is reflected and language is added indicating the consideration to issue additional obligations to fund the balance of public costs. The maximum amount of bonded indebtedness is slightly less than before ($8,700,000 from $9,000,000). ➢ Section IIIX Original Tax Capacity Rate (Pa-ge 8) —the table was edited to correct the label for each column separating the total tax rate for parcels located within the Robbinsdale school district and the Brooklyn Center school district. ➢ Section IILL Projected Retained Captured Net Tax Capacity and Proiected Tax Increment (Page 9) — with the change to the market value, a slight reduction in the total tax capacity, retained tax capacity and • first full y ear of tax increment all reduced slightly. Gary Eitel, City of Brooklyn Center Tax Increment Finance Plan for TIF District No. 5 March 23, 2011 . Page 3 ➢ Section III.R Estimated Impact on Other Taxing Jurisdictions (Page 12) — with the change to the market value, the total tax increments generated over the life of the district and the amounts attributable to each taxing entity all declined slightly. In paragraph #2 describing expected city impacts, the word noticeable was replaced with significant in regard to police and fire. The sentence describing the anticipation of issuing general obligation bonds was changed based on the revised financing plan. ➢ Exhibit III — Executive Summary of Finding - Renewal and Renovation Eligibility Assessment — the summary was amended with the receipt of a revised Executive Summary Report from the City's consultant. ➢ Exhibits IV through VIII all changed with the changes to the projected tax increments, etc. • • Economic Development Authority in and for the City of Brooklyn Center, Minnesota Modification to Redevelopment Plan for Housing Development and Redevelopment Project No.1 And Tax Increment Financing Plan for Tax Increment Financing District No. 5 (A Renewal and Renovation District) Shingle Creek Crossing Project Within Housing Development and Redevelopment Project No.1 Dated: March 23, 2011 Adopted: March 28, 2011 Prepared by: SPRINGSTED INCORPORATED 380 Jackson Street, Suite 300 St. Paul, MN 55101 -2887 (651) 223 -3000 . WWW.SPRINGSTED.COM TABLE OF CONTENTS • Section Pa e s SectionI Definitions .............................................................................................. ..............................1 Section II Modification to Redevelopment Plan for Redevelopment Project ....................... ............................... 2 Section I LA Statement and Finding of Public Purpose .............................................. ............................... 2 Section 11.6 Statutory Authorization ..................................................................... ............................... 2 Section I I.0 Statement of Objectives .................................................................... ............................... 2 Section III Tax Increment Financing District Plan for Tax Increment Financing District No. 5 . ............................... 3 Section I II.A Designation of Tax Increment Financing District as a Renewal and Renovation District .................. 3 Section 111.6 Duration of the TIF District ................................................................. ..............................4 Section I II.0 Property to be Included in the TIF District ............................................. ............................... 4 Section I II.D Property to be Acquired in the TIF District ............................................ ............................... 5 Section I II.E Specific Development Expected to Occur Within the TIF District ................ ............................... 5 Section I II.F Findings and Need for Tax Increment Financing .................................... ............................... 5 Section 1II.G Estimated Public Costs ..................................................................... ..............................7 Section III.H Estimated Sources of Revenue ........................................................... ..............................7 Section 111.1 Estimated Amount of Bonded Indebtedness ........................................... ............................... 7 Section I II.J Original Net Tax Capacity ................................................................. ............................... 8 Section I II.K Original Tax Capacity Rate ............................................................... ............................... 8 Section I111 Projected Retained Captured Net Tax Capacity and Projected Tax Increment .............................. 9 • Section I II.M Use of Tax Increment ...................................................................... ............................... 9 Section Ill.N Excess Tax Increment ..................................................................... .............................10 Section 111.0 Tax Increment Pooling and the Five Year Rule ...................................... .............................10 Section III.P Limitation on Administrative Expenses ................................. ............................... ..........11 Section I II.Q Limitation on Property Not Subject to Improvements - Four Year Rule ........ .............................11 Section I II.R Estimated Impact on Other Taxing Jurisdictions .................................... .............................12 Section III.SPrior Planned Improvements ............................................................. .............................12 Section 1113 Development Agreements ..... ............................... ............................. .............................13 Section I II.0 Assessment Agreements ................................................................. .............................13 Section I ILV Modifications of the Tax Increment Financing Plan ................................. .............................13 Section I II.W Administration of the Tax Increment Financing Plan ............................... ..........................:..13 Section III.X Financial Reporting and Disclosure Requirements ...........................:...... .............................14 Map of the Redevelopment Project Area .................................................................. ............................... EXHIBIT I Map of the Tax Increment Financing District ........................................................... ............................... EXHIBIT II Summary Finding for Renewal and Renovation District .......................................... ............................... EXHIBIT Ill AssumptionsReport ........................................................................ ............................... .......................EXHIBIT IV Projected Tax Increment Report ............................. ... ............................... .............. ........................EXHIBIT V Estimated Impact on Other Taxing Jurisdictions Report ................. ............................... ........................EXHIBIT VI Market Value Analysis Report ....................................................... ............................... ........................EXHIBIT VII Projected District Cash Flow and Bond Repayment ...................... ............................... .......................EXHIBIT VIII • Economic Development Authority in and for the City of Brooklyn Center • Section I Definitions The terms defined in this section have the meanings given herein, unless the context in which they a re used indicates a different meaning: "Authori " means the Economic Development Authority in and for the City of Brooklyn Center. "Brooklyn Center School District" means Independent School District No. 286, Minnesota. "City" means the City of Brooklyn Center, Minnesota; also referred to as a "Municipaliy' "City Council" means the City Council of the City; also referred to as the "Governing Body " . "County" means Hennepin County, Minnesota. "EDA Act" means Minnesota Statutes, Section 469.090 to 469.108, inclusive, as amended. "HRA Act" means Minnesota Statutes, Section 469.001 to 469.047, inclusive, as amended. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project. "Redevelopment Project" means Housing Development and Redevelopment Project No. 1 in the City, which is described in the corresponding Redevelopment Plan. "Project Area" means the geographic area of the Redevelopment Project. • "Robbinsdale School District" means Independent School District No. 281, Minnesota. "School Districts" means collectively the Brooklyn Center and Robbinsdale School Districts. "State" means the State of Minnesota. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1799, both inclusive. "TIF District" means Tax Increment Financing District No. 5. "TIF Plan" means the tax increment financing plan for the TIF District (this document). • sprin sted Page 1 Economic Development Authority in and for the City of Brooklyn Center Section 11 Modification to Redevelopment Plan for Redevelopment Project • The following text represents a Modification to the Redevelopment Plan for Redevelopment Project No. 1: This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for Redevelopment Project No. 1. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 5 to assist in the redevelopment of the Brookdale Mall by Gatlin Development Company (the "Developer") under the terms of a Development Agreement. The land in TIF District No. 5 is shown in Exhibit I. The Estimated Public Costs is modified to include those set forth in Section III.G of the Tax Increment Financing Plan for Tax Increment Financing District No. 5. For further information, a review of the Redevelopment Plan for Redevelopment Project No.1 is recommended and is available from the City of Brooklyn Center. Other relevant information is contained in the Tax Increment Financing Plan for Tax Increment Financing Districts No. 1, No. 2, No. 3, and No. 4 located within Redevelopment Project No. 1. A map of Redevelopment Project No.1 is attached as Exhibit 1. Section ILA Statement and Finding of Public Purpose On April 25, 1994, the City Council and Authority expanded the geographic boundaries of the Earle Brown Farm Redevelopment Project to include Housing Development Project No. 1 and other properties and provided additional housing powers. The modified redevelopment project is renamed. Housing Development and Redevelopment Project No. 1. The Authority intends to use the powers allowed under the EDA Act and HRA Act to promote development and • redevelopment through the City and to pool resources in order to reduce financial barriers to providing decent housing and employment opportunities. Section 11.1 Statutory Authorization On August 24, 1987, the City Council authorized the establishment of the Brooklyn Center Economic Development Authority (Authority). Pursuant to City Council Resolution No. 87 -170, the Authority has and may exercise all of the powers conferred by law upon a Housing and Redevelopment Authority. The Authority has been authorized by the City to carry out all powers of and administer all projects initiated by the Brooklyn Center HRA. The Authority established Housing Development and Redevelopment Project No.1 pursuant to the EDA Act and the HRA Act. HRA Act authorizes the Authority to exercise all the powers relating to a housing and redevelopment authority granted under Minnesota Statutes, Sections 469.001 to 469.047, or other law. Within the City areas exist where public involvement is necessary to cause redevelopment to occur. The Authority has certain statutory powers pursuant to the TIF Act to assist in financing eligible activities related to these redevelopment needs. Section ILC Statement of Objectives The sampling of the general goals and objectives of the Redevelopment Plan are listed below: • To provide decent, safe and sanitary housing for persons of low and moderate income. • To provide governmental assistance to eliminate slum and blight. ■ To provide an ongoing benefit to the residents of the City and those who may frequent the area. • To enhance the tax base of the City. • Spriincisted Page Economic Development Authorityin and for the City of Brooklyn Center . ■ To provide maximum opportunity, consistent with the needs of the City, for development by private enterprise. ■ To better utilize vacant or undeveloped land. Specific objectives for the Shingle Creek Crossing Redevelopment include removal and clearance of blighted properties; construction of new commercial buildings, infrastructure improvements including streets, utilities and storm water management; that result in increased opportunities for commercial development and will otherwise benefit the health, safety, morals and welfare of the residents of the City. Section 111 Tax Increment Financing District Plan for Tax Increment Financing District No. 5 Section III.A Designation of Tax Increment Financing District as a Renewal and Renovation District Renewal and Renovation districts are a type of tax increment financing district in which the following conditions exists: 1) i) parcels comprising at least 70% of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures; ii) 20 percent of the buildings are structurally substandard; and iii) 30 percent of the other buildings require substantial renovation or clearance to remove existing conditions such as: inadequate street layout, incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for improvement or conversion, or other identified hazards to the health, safety, and general well -being of the community. 2) the conditions described in clause (1) are reasonably distributed throughout the geographic area of the district. . For purposes of determining whether a building is structurally substandard, whether parcels are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures, or whether noncontiguous areas qualify, the provisions of subdivision 10, paragraphs (b) through (f), apply. For districts consisting of two more noncontiguous areas, each area must individually qualify under the provisions listed above, as well as the entire area must also qualify as a whole. The TIF District qualifies as a renewal and renovation district in that it meets all of the criteria listed in (1) and (2) above. An executive summary of a report prepared by Alden Associates Architectural Services that details the qualifications is included in Exhibit III. A copy of the entire report with supporting facts and documentation for this determination is on file with the Authority and is available to the public upon request. The full report will be retained by the Authority for the life of the TIF District. "Structurally substandard" is defined as buildings containing defects or deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection (including egress), layout and condition of interior partitions, or similar factors. Generally, a building is not structurally substandard if it is in compliance with the building code applicable to a new building, or could be modified to satisfy the existing code at a cost of less than 15% of the cost of constructing a new structure of the same size and type. A city may not find that a building is structurally substandard without an interior inspection, unless it can not gain access to the property and there exists evidence which supports the structurally substandard finding. Such evidence includes recent fire or police inspections, on -site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence. Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained. A parcel is deemed to be occupied by a structurally substandard building if the following conditions are met: • (1) the parcel was occupied by a substandard building within three years of the filing of the request for certification of the parcel as part of the district; spr ngsted Page Economic Development Authority in and for the City of Brooklyn Center (2) the demolition or removal of the substandard building was performed or financed by the City, or was • performed by a developer under a development agreement with the City, (3) the City found by resolution before such demolition or removal occurred that the building was structurally substandard and that the City intended to include the parcel in the TIF district, and (4) the City notifies the county auditor that the original tax capacity of the parcel must be adjusted upon filing the request for certification of the tax capacity of the parcel as part of a district. In the case of (4) above, the County Auditor shall certify the original net tax capacity of the parcel to be the greater of (a) the current tax capacity of the parcel, or (b) a computed tax capacity of the parcel using the estimated market value of the parcel for the year in which the demolition or removal occurred, and the appropriate classification rate(s) for the current year. A parcel is deemed "occupied" if at least 15% of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots; or other similar structures. At least 90 percent of the tax increment from a renewal and renovation district must be used to finance the cost of correcting conditions that allow designation as a redevelopment district. These costs include, but are not limited to, acquiring properties containing structural) substandard buildings or improvements or hazardous substances, q p g p p 9 y 9 pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of land, removal of hazardous substances or remediation necessary to develop the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the Authority may be included in the qualifying costs. Section 111.6 Duration of the TIF District Renewal and Renovation districts may remain in existence 15 years from the date of receipt of the first tax increment. • The Authority anticipates that the TIF District will remain in existence the maximum duration allowed by law (projected to be through the year 2028). Modifications of this plan (see Section III.V) shall not extend these limitations. All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the Authority. Section III.0 Property to be Included in the TIF District The TIF District encompasses approximately 60 acres of land located within the Project Area. The TIF District includes the tax parcels identified in the table below and all adjacent and contiguous rights of way. A map of the TIF parcels is included in Exhibit II. School Parcel ID: District Address Partial Legal Description 02- 118 -21 -32 -0017 #281 1108 Brookdale Center Reg. Land Survey No. 1766, Tract A 02- 118 -21 -32 -0014 #281 1200 Brookdale Center Reg. Land Survey No. 1710, Tract B 02- 118 -21 -32 -0009 #281 1265 Brookdale Center Reg. Land Survey No. 1469, Tract C 02- 118 -21 -32 -0010 #281 1265 Brookdale Center Reg. Land Survey No. 1469, Tract D 02- 118- 21 -32- 0011 #281 1100 Brookdale Center Reg. Land Survey No. 1469, Tract E 02- 118 -21 -23 -0021 #281 No address Reg. Land Survey No. 1469, Tract A 02- 118 -21 -23 -0023 #281 1150 Brookdale Center Reg. Land Survey No. 1710, Tract C 02- 118- 21 -31- 0055 1 77#286 2501 County Road No. 10 Reg. Land Survey No. 1614, Tract A • Springsted Page 4 Economic Development Authority in and for the City of Brooklyn Center • Section IILD Property to be Acquired in the TIF District The Authority may acquire and sell any or all of the property located within the TIF District. However, the Authority does not anticipate acquiring parcels within the TIF District. Section TILE Specific Development Expected to Occur Within the TIF District The proposed Project will redevelop the Brookdale Mall, excluding the Sears department store, demolishing the three anchors and all but 123,242 s.f. of the mall space. Once complete the Project is expected to include a Walmart Supercenter (152,036 s.f.), three junior anchors (120,735 s.f.), three restaurant pads (25,160 s.f.), six retail stores (93,645 s.f.), plus 123,242 s.f. of renovated mall space (total retail space 514,818 s.f.). The Developer anticipates commencing demolition and site grading around June 1, 2011. The full build out of the site is expected to take three years, as follows: ■ Walmart and one junior box of 53,850 s.f. expected to be 100% complete in 2012 and assessed January 2, 2013 for taxes payable 2014; ■ Partial value of 123,242 s.f. mall space 64% complete in 2012, with 100% completion in 2013 to be assessed January 2, 2014 for taxes payable 2015; ■ 93,645 s.f. of retail space, two junior boxes of 66,885 s.f. and one restaurant (7,475 s.f.) expected to be 100% complete in 2013 and assessed January 2, 2014 for taxes payable 2015; and ■ Remaining two restaurant pads of 17,685 s.f. expected to be 100% complete in 2014 and assessed January 2, 2015 for taxes payable 2016. • Section III.F Findings and Need for Tax Increment Financing In establishing the TIF District, the City makes the following findings: (1) The TIF District qualifies as a renewal and renovation district; See Section IILA of this document for the reasons and facts supporting this finding. (2) The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and the increased market value of the site that could reasonably be expected to occur without the use of tax increment would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan; Factual Basis: Proposed development not expected to occur.- The proposed development consists of approximately 515,000 s.f. of retail uses constructed by the Developer, Gatlin Development Company. The Developer has indicated they will begin construction of the proposed project only if the Authority can provide public assistance The Developer has demonstrated that current economic conditions make it unfeasible for the project to proceed. Extensive redevelopment costs including site remediation and environmental contamination along With extensive street and landscaping costs required by the City cannot be supported by the anticipated . project revenues, and given the speculative risk of the extensive retail tenanting required. spr ngsted Page Economic Development Authonty in and for the City of Brooklyn Center No higher market value expected. • This finding is based on the fact that no other development of comparable scope to the proposed development is practical without the same type of assistance described in this plan. The City believes the reinvestment in this key site will provide for economic growth and redevelopment to the fullest potential, which would not be realized but for the use of tax increment financing. To summarize the basis for the City's findings regarding alternative market value, in accordance with Minnesota Statutes, Section 469.175, Subd. 3(d); the City makes the following determinations: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is anywhere from $0 to some modest amount based on small scale development that could be possible without assistance; any estimated values would be too speculative to ascertain. b. If the proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately $48,731,797 (See Exhibit IV and VII). C. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $7,342,481 (See Exhibit VII). d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $41,389,316 (the amount in clause b less the amount in clause c) without tax increment assistance. (3) The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a • whole, for redevelopment of the TIF District area by private enterprise. Factual basis: The anticipated redevelopment projected by the Developer includes a mix of retail uses and substantial site improvements consistent with the City's design goals. (4) The TIF Plan conforms to general plans for development of the City as a whole. Factual basis: The City Planning Commission has determined that the development proposed in the TIF Plan conforms to the City comprehensive plan. (5) The Authority elects the method of tax increment computation set forth in Minnesota Statutes, Section 469.177, Subdivision 3(b) (see method (b) in Section I I1.Q. Sprt!_t1gsted Page 6 Economic Development Authority in and for the City of Brooklyn Center • Section III.G Estimated Public Costs The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax increments of the TIF District. Land/Building acquisition $2,400,000 Site improvement1prep costs 2,300,000 Parking Facilities 0 Streets and Sidewalks 0 Installation of Public Utilities 0 Loan /Note /Bond Interest Payments 2,926,468 Administrative expenses 1,183,000 Other Expenditures Bond Issuance Costs —Admin 15,000 Capitalized Interest payments 125,000 EDA Identified Public Im r— Within TIF District 1,882,532 EDA Identified Public Im r— Outside TIF District 1,198,000 Total $12,030,000 The Authority reserves the right to administratively adjust the amount of any of the items listed above or to incorporate additional eligible items, so long as the total estimated public cost is not increased. Section IILH Estimated Sources of Revenue Tax Increment revenue* $11,980,000 Interest on invested funds 50,000 Bond proceeds 0 Loan proceeds 0 Other Revenues 0 Total $12,03000 Net of State Auditor Deduction The Authority reserves the right to finance any or all public costs of the TIF District using pay -as- you -go assistance, internal funding, general obligation or revenue debt, or any other financing mechanism authorized by law. The Authority also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. The Authority anticipates issuing a pay- as- you-go note to the Developer and executing internal borrowing from allowable general funds of the Authority and /or City to finance a portion of the public costs. Section 111.1 Estimated Amount of Bonded Indebtedness As stated above, the Authority anticipates issuing a pay -as- you -go note to the Developer and executing internal borrowing from allowable general funds of the, Authority and /or City to finance a portion of the public costs. The Authority will consider issuing additional obligations to include general obligation or revenue debt, or internal funding to finance the balance of the public costs of the TIF District. All defined as obligations /bonds of the district. The Authority and City reserve the right to issue such obligations/bonds in an amount not to exceed $8,700,000 ($7,920,532 for public costs other than administrative expenses and loan /note /bond interest payments plus 10 %). The expected cash flow demonstrating repayment of the obligations/bonds is shown in Exhibit VIII. • Spring ted Page 7 Economic Development Authority in and for the City of Brooklyn Center Section III.J Original Net Tax Capacity • The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 and December 31, inclusive, this value is based on the current assessment year. The Estimated Market Value of all property within the TIF District as of January 2, 2010, for taxes payable in 2011, is $12,645,000. Upon establishment of the TIF District it is estimated that the original net tax capacity of the TIF District will be $248,210. Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of. (1) changes in the tax - exempt status of property; (2) reductions or enlargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements; or (4) changes in property classification rates. Section IIIX Original Tax Capacity Rate The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all • local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the original net tax capacity. In future years, the amount of tax increment generated by the TIF District will be calculated using the lesser of (a) the sum of the current local tax rates at that time or (b) the original tax capacity rate of the TIF District. At the time this document was originally prepared, the sum of the local tax rates that apply to property in the TIF District, for taxes levied in 2009 and payable in 2010, was all that was available. For purposes of estimating the tax increment generated by the TIF District, this available local tax rate has been used and is shown below. The County Auditor shall certify the rate applicable to the taxes payable year as the original net tax capacity as the original tax capacity rate of the TIF District whenever it becomes available. Tax Rate Payable 2010 Taxing Jurisdiction For parcels located within For parcels located within Robbinsdale SD Brooklyn Center SD City of Brooklyn Center 52.412% 52.412% Hennepin County 42.640% 42.640% ISD #281 (Robbinsdale) 28.621% NA ISD #286 (Brooklyn Center) NA 51.173% Other 8.219% 8.219% Total Tax Rate 131.892% 154.444% • Sprincisted Page 8 Economic Development Authority in and for the City of Brooklyn Center • Section 1111 Projected Retained Captured Net Tax Capacity and Projected Tax Increment The Authority anticipates that the building construction for all of the development will be completed by December 31, 2014, creating a total tax capacity for the TIF District of $1,226,036 as of January 2, 2015. The captured tax capacity as of that date is estimated to be $630,464 and the first full year of tax increment is estimated to be $842,930 payable in 2016. A complete schedule of estimated tax increment from the TIF District is shown in Exhibit V. The estimates shown in this TIF Plan assume that the commercial /industrial class rates remain at 1.50% for the first $150,000 of the estimated market value and 2.0% for the estimated market value above $150,000. The estimates assume no annual increase in market value. Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. For communities affected by the fiscal disparity provisions of Minnesota Statutes, Chapter 473F and Chapter 276A, the original net tax capacity of the TIF District shall be determined before the application of fiscal disparity. In subsequent years, the current net tax capacity shall either (a) be determined before the application of fiscal disparity or (b) exclude the product of any fiscal disparity increase in the TIF District (since the original net tax capacity was certified) times the appropriate fiscal disparity ratio. The method the City elects shall remain the same for the life of the TIF District, except that a single change may be made at any time from method (a) to method (b) above. The Authority elects method (b), or M.S. Section 469.177, subdivision 3(b). The County Auditor shall certify to the Authority the amount of captured net tax capacity each year. The Authority • may choose to retain any or all of this amount. It is the Authority's intention to retain 100% of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. Exhibit IV gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit V which shows the projected tax increment generated over the anticipated life of the TIF District. Section III.M Use of Tax Increment Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of financial reporting and auditing of tax increment financing information throughout the state. Exhibit V shows the projected deduction for this purpose over the anticipated life of the TIF District. The Authority has determined that it will use 100% of the remaining tax increment generated by the TIF District for any of the following purposes: (1) pay for the estimated public costs of the TIF District (see Section III.G) and County administrative costs associated with the TIF District (see Section 111.P); (2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; • (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175, Subdivision 1a; or Sprinigsted Page Economic Development Authority in and for the City of Brooklyn Center • (5) return excess tax increments to the County Auditor for redistribution to the City, County and School Districts. Tax increments from properly located in one county must be expended for the direct and primary benefit of a project located within that county, unless both county boards involved waive this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the State or federal government, or for a commons area used as a public park, or a facility used for social, recreational, or conference purposes. This prohibition does not apply to the construction or renovation of a parking structure or of a privately owned facility for conference purposes. If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then flair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section III.N Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan, the Authority shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; • (2) discharge the pledge of tax increments thereof; (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or (4) return excess tax increments to the County Auditor for redistribution to the City, County and School District. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. Section 111.0 Tax Increment Pooling and the Five Year Rule At least 80% of the tax increments from the TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District (see Section III.A for additional restrictions). No more than 20% of the tax increments may be spent on costs outside of the TIF District but within the boundaries of the Project Area, except to pay debt service on credit enhanced bonds. All administrative expenses are considered to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District if such amounts are: (1) actually paid to a third party for activities performed within the TIF District within five years after certification of the district; (2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five -year period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. • springsted Page 10 Economic Development Authorityin and for the City of Brooklyn Center • (3) used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district; or (4) used to reimburse a party for payment of eligible costs (including interest) incurred within five years from certification of the district. Beginning with the sixth year following certification of the T IF District, at least 80% of the tax increments must be used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District must be decertified. The Authority anticipates that tax increments will be spent outside of the TIF District (including a portion for allowable administrative expenses) for TIF- eligible expenditures consistent with the Authority's redevelopment goals. Section IMP Limitation on Administrative Expenses Administrative expenses are defined as all costs of the Authority other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the physical development of the real property in the project; (3) relocation benefits paid to, or services provided for, persons residing or businesses located in the project; • (4) amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to section 469.178; or (5) amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clause (1) to (3). Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or economic development consultants, and actual costs incurred by the County in administering the TIF District. No tax increment may be used to pay any administrative expenses for a project which exceed ten percent of total estimated tax increment expenditures authorized by the tax increment financing plan or the total tax increments, as defined in section 469.174, subdivision 25, clause (1), from the district, whichever is less. Section III.Q Limitation on Property Not Subject to Improvements - Four Year Rule If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the Authority or owner of the parcel subsequently commences any of the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as . most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. Springsted Page 11 Economic Development Authorityin and for the City of Brooklyn Center • Section 111.11 Estimated Impact on Other Taxing Jurisdictions Exhibit VI shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The Authority believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota Statutes, Section 469.175, Subdivision 2, are listed below. 1. The total amount of tax increment that will be generated over the life of the district is estimated to be $12,022,971. 2. The City does not expect to have significant impact to city provided services such as police and fire protection resulting from the establishment of the TIF district and the eventual redevelopment of the project site. The City expects to incur public infrastructure costs related to the project and fund those costs directly from the TIF district revenues. The City may consider issuing general obligation tax increment revenue bonds to assist in financing a portion of the public costs, but considers the amount to be not more than $2 million which therefore would not impact the City's future ability to issue other debt for general fund purposes. 3. The amount of tax increments over the life of the district that would be attributable to the Brooklyn Center school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is estimated to be $362,299. • 4. The amount of tax increments over the life of the district that would be attributable to the Robbinsda le school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is estimated to be $2,371,743. 5. The amount of tax increments over the life of the district that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be $3,835,345. 6. No additional information has been requested by the county or school districts that would enable it to determine additional costs that will accrue to it due to the development proposed for the district. Section III.S Prior Planned Improvements The Authority shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. At the time this document was prepared no building permits had been issued in the previous 18 months in conjunction with any of the properties within the TIF District. • Springsted Page 12 Economic Development Authority in and for the City of Brooklyn Center • Section III.T Development Agreements For certain TIF districts, limitations are placed on properties to be acquired by the Authority if purchased with tax increment bond proceeds (to which tax increment from the property is pledged). A renewal and renovation district does not have such restrictions. The Authority anticipates entering into a development agreement to fulfill the redevelopment of the TIF district, and does not anticipate acquiring any property located within the TIF District. Section IIW Assessment Agreements The Authority may, upon entering into a development agreement, also enter into an assessment agreement with the developer, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and School District. The Authority reserves the right to enter into assessment agreements for any portions of the TIF District. • , Section III.V Modifications of the Tax Increment Financing Plan Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of bonded indebtedness to be incurred; a determination to capitalize interest on the debt if that determination was not a part of the original plan; increase in that portion of the captured net tax capacity to be retained by the Authority; increase in the total estimated public costs; or designation of additional property to be acquired by the Authority shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if: (1) the only modification is elimination of parcels from the TIF District; and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the City agrees that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. Section III.W Administration of the Tax Increment Financing Plan Upon adoption of the TIF Plan, the Authority shall submit a copy of such plan to the Minnesota Department of Revenue. The Authority shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the Authority shall submit copies of the TIF Plan, the resolution. establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned • improvements. The Authority shall also send the County Assessor any assessment agreement establishing the S`p insisted Page 13 Economic Development AuthonlyIn and for the City of Brooklyn Center minimum market value of land and improvements in the TIF District, and shall request that the County Assessor • review and certify this assessment agreement as reasonable. 9 The County shall distribute to the Authority the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values, or changes in property classification rates or formulas. In administering and implementing the TIF Plan, the following actions should occur on an annual basis: (1) prior to July 1, the Authority shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to insure that the new value will be recorded in a .timely manner. (2) if the County Auditor receives the request for certification of a new TIF District, or for modification of an existing TIF District, before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests received on or after July 1 shall be Used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: (a) the value of property that changes from tax - exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; (b) the original net tax capacity may be modified by any approved enlargement or reduction of the TIF District; (c) if laws governing the classification of real property cause changes to the percentage of • estimated market value to be applied for property tax purposes, then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the Authority of all changes made to the original net tax capacity of the TIF District. Section 11111 Filing TIF Plan, Financial Reporting and Disclosure Requirements The Authority will file the TIF Plan and any subsequent amendments thereto, with the Commissioner of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes, Section 469.175, subdivision 4A. The Authority will comply with all reporting requirements for the TI F District under Minnesota Statutes, Section 469.175, subdivisions 5 and 6. • Spr ngst d Page 14 Exhibit MAP OF TAX INCREMENT FINANCING DISTRICT NO.5 (SHINGLE CREEK CROSSING) AND Hous eve men and e veld t Piro + No: Project Arens a'...r y to ''�t VIA , J 7 - I tz! i .... �... -, e "r � 6 k zisa� �' �� ?Y'�•t"""fs tut 2€ t §€ ��azY'� C s.. .. w { t, mt're s €y3 �, ��a r ''b'��L"i ..., �`' an�.ax+ ps - fix ne L. SRI fie ue` 7 d - € Legen � j Pr*d area Boun • Sprinsted Page 15 Exhibit 11 MAP OF • Tax I ncrement Financing District No. Sh C reek Crossing Town Ce nter 'RUM. 1;:m,ro #{ .. p9A r r _... e w aK Y 1 a w y�. <�..... f � "< . .............. __.. i "� 1 Ru m _ .... ......... r > x i 11rQ L I t £ Y � € L... 1 ............. _.. t e. 3 f ��P : & e4 j b Ys# 1 t # ..... ......... s N j_ ) ii gyp. x <° r� Sta '3 r7 �� �ti BNQ(JACLI;ir ' Mill 1111 LiF17EJ? • Springsted Page 16 Exhibit 111 • EXECUTIVE SUMMARY OF FINDINGS RENEWAL AND RENOVATION ELIGIBILITY ASSESSMENT PROPOSED BROOKDALE TIF DISTRICT Purpose Alden Associates Architectural Services was hired by the city of Brooklyn Center to survey and evaluate the properties within the proposed Brookdale Tax Increment Financing (TIF) District. The proposed district is bordered on the north by County Road 10 to the north, Highway 100 to the east and south, and Xerxes Avenue N to the west. The purpose of our work was to independently ascertain whether the qualification tests for tax increment eligibility, as required under Minnesota Statute, could be met. The findings and conclusions drawn herein are solely for the purpose of tax increment eligibility and are not intended to be used outside the scope of this assessment. Scope of Work The proposed district consists of 8 parcels comprised of the following types of improvements: 4 commercial structures on 5 parcels, and 4 parcels with paving improvements. Evaluations Interior inspections were completed for all 4 buildings. An exterior inspection was also completed for all buildings. Findings • Coverage Test — In the proposed TIF District, all of the parcels met the coverage test with a 88.5 % area coverage. This exceeds the 70% area coverage requirement. Condition of Buildings Test — 25 percent of the buildings — 1 of the 4 buildings were found to be "structurally substandard" and 1 of the remaining 3 buildings were found to require "substantial renovation or clearance ", when considering code deficiencies and other deficiencies of sufficient total significance to justify substantial renovation or clearance (see definition of "structurally substandard" and "substantial renovation or clearance" as follows). The Brookdale Mall building (1 of the 4 which is 25 %) was found to be "structurally substandard" due to significant deficiencies such as structural elements, essential utilities, and fire. protection, justifying substantial renovation; and the JC Penney building (1 of the remaining 3 which is 33 %) was found to require "substantial renovation or clearance," when considering significant health and safety deficiencies and overall obsolescence, rendering the building not suitable for improvement or conversion. This meets the Condition of Buildings Test whereby at least 20% of buildings, not including outbuildings, must be found "structurally substandard and 30% of the other buildings require substantial renovation or clearance ", to remove existing conditions, such as: inadequate street layout, incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for improvement or conversion, or other identified hazards to the health, safety and general wellbeing of the community. Conclusion Our surveying and evaluating of the properties within this proposed Renewal and Renovation District render results that in our professional opinion qualify the district eligible under the statutory criteria and formulas for a Renewal and Renovation Tax Increment Financing District (State Statute 469.174 Subd.10 and l0a). • Sr €dated Page 17 Exhibit IV • Assumptions Report City of Brooklyn Center, Minnesota Tax Increment Financing District (Renewal & Renovation) Brookdale Mall Redevelopment Project (Shingle Creek Crossing) TIF Plan Scenario - R &R District - $61.38M EMV - 3 year build -out Type of Tax Increment Financing District Renewal & Renovation Maximum Duration of TIF District 15 years from 1 st increment Projected Certification Request Date 07/30111 Decertification Date 12131/28 (16 Years of Increment) 2011/2012 Base Estimated Market Value $12,645,000 Original Net Tax Capacity $248,210 Assessment/Collection Year 2011/2012 201212013 2013/2014 2014/2015 2015/2016 Base Estimated Market Value $12,645,000 $12,645,000 $12,645,000 $12,645,000 $12,645,000 Increase in Estimated Market Value 0 269,168 17,668,812 43,519,782 48,731,797 Total Estimated Market Value 12,645,000 12,914,168 30,313,812 56,164,782 61,376,797 • Total Net Tax Capacity $248,210 $256,783 $604,776 $1,121,796 $1,226,036 City of Brooklyn Center 52.412% 52.412% Hennepin County 42.640% 42.640% School District ISD #281 28.621% 51.173% ISD #286 Other 8.219% 8.219% Local Tax Capacity Rate 131.892% 154.444% 2009/2010 ISD #281 ISD #286 Fiscal Disparities Contribution From TIF District 35.5239% Administrative Retainage Percent (maximum =10 %) 10.00% Pooling Percent 10.00 % In total, varies throughout Notes Projections assume no future changes to tax rates or tax capacity classification rates or market values. Current base parcel value information as provided by Hennepin County. Development scope and buiidout timeline provided by Developer. 3 -year timeline. Projected future market value provided by the City. sprigsted Page 18 Exhibit V Projected Tax Increment Report City of Brooklyn Center, Minnesota Tax Increment Financing District (Renewal & Renovation) Brookdale Mall Redevelopment Project (Shingle Creek Crossing) TIF Plan Scenario - R &R District - $61.38M EMV - 3 year build -out By Taxing District Properties in ISD #281 (Robbinsdale SD) Properties in ISD #286 (Brooklyn Center SD) Less: Less: Retained Times: Less: Less: Retained Times: Annual Total Original Fiscal Captured Tax Annual Total Original Fiscal Captured Tax Annual Period Net Tax Net Tax Disp. @ Net Tax Capacity Gross Tax Net Tax Net Tax Disp. @ Net Tax Capacity Gross Tax Ending Capacity Capacity 35.5239% Capacity Rate Increment Capacity Capacity 35.5239% Capacity Rate Increment (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 1 (13) 12131/11 232,480 232,480 0 0 131.892% 0 15,730 15,730 0 0 154.444% 0 12/31/12 232,480 232,480 0 0 131.892% 0 15,730 15,730 0 0 154.444% 0 12/31/13 241,053 232,480 3,046 5,527 131.892% 7,290 15,730 15,730 0 0 154.444% 0 12/31/14 588,457 232,480 126,457 229,520 131.892% 302,719 16,319 15,730 209 380 154.444% 587 12131/15 1,027,674 232,480 282,484 512,710 131.892% 676,224 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/16 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/17 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/18 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/19 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/20 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/21 1,131,914 232,480 319,514 579,920 131.892% 764,869_ 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/22 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/23 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/24 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/25 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/26 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/27 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444 % 78,061 12/31/28 1,131,914 232,480 319,514 579,920 131.892% 764,869 94,122 15,730 27,848 50,544 154.444% 78,061 12/31/291 0 0 0 0 131.892%1 0 0 0 0 0 154.444% 0 $10,929,530 $1,093,441 S ringSted Page 19 Exhibit V Projected Tax Increment Report City of Brooklyn Center, Minnesota Tax Increment Financing District (Renewal &Renovation) Brookdale Mall Redevelopment Project (Shingle Creek Crossing) TIF Plan Scenario - R &R District - $61.38M EMV - 3 year build -out Combined Less: Less: Retained Total Less: Total Less: Annual Total Original Fiscal Captured Annual State Aud. Annual Admin Annual Period Net Tax Net Tax Disp. @ Net Tax Gross Tax Deduction Tax Increment Retainage Net Ending Capacity Capacity 35.5239% Capacity Increment 0.360% to Authority 10% Revenue (1) (14) (15) (16) (17) (18) (19) (20) (21) (22) 12/31/11 248,210 248,210 0 0 0 0 0 0 0 12/31/12 248,210 248,210 0 0 0 0 0 0 0 12/31/13 256,783 248,210 3,046 5,527 7,290 26 7,264 726 6,538 12/31/14 604,776 248,210 126,666 229,900 303,306 1,092 302,214 30,221 271,993 12/31/15 1,121,796 248,210 310,332 563,254 754,285 2,715 751,570 75,157 676,413 12/31/16 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/17 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/18 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/19 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/20 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/21 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/22 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/23 1,226,036 248,210 347,362 630,464 842,930 3;035 839,895 83,990 755,905 12/31/24 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12131/25 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/26 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/27 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/28 1,226,036 248,210 347,362 630,464 842,930 3,035 839,895 83,990 755,905 12/31/29 0 0 0 0 0 0 0 0 0 $12,022,971 $43,288 $11,979,683 $1,197,974 $10,781,709 Springsted Page 20 i • • Exhibit VI Estimated Impact on Other Taxing Jurisdictions Report City of Brooklyn Center, Minnesota Tax Increment Financing District (Renewal & Renovation) Brookdale Mail Redevelopment Project (Shingle Creek Crossing) TIF Plan Scenario - R&R District - $61.38M EMV - 3 year build -out Without Project or TIF District With Project and TIF District Projected Hypothetical 2009/2010 2009/2010 Retained New Hypothetical Hypothetical Tax Generated Taxable 2009/2010 Taxable Captured Taxable Adjusted Decrease In by Retained Taxing Net Tax Local Net Tax Net Tax Net Tax Local Local Captured Jurisdiction Capacity (1) Tax Rate Capacity (1) + Capacity = Capacity Tax Rate T Rate ( *) N.T.C. ( *) City of Brooklyn Center 17,960,128 52.412% 17,960,128 $630,464 18,590,592 50.635% 1.777 % 319,233 Hennepin County 1,439,645,193 42.640% 1,439,645,193 $630,464 1,440,275,657 42.621% 0.019% 268,712 ISD #281 (Robbinsdale) 88,612,938 28.621% 88,612,938 $579,920 89,192,858 28.435% 0.186% 164,900 ISD #286 (Brooklyn Center) 5,691,835 51.173% 5,691,835 $50,544 5,742,379 50.723% 0.450% 25,637 Other (2) -- 8.219% — $630,464 — 8.219% — — Totals ISD #281 131.892% 129.910% 1.982% ISD #286 154.444% 152.197% 2.247% * Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above, the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax rate would decrease by 1.982% to 2.247% (see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity = total net tax capacity - captured TIF - fiscal disparity contribution, if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 5.32% or 6.23 %of the total tax rate. 1 - in g st Page 21 Exhibit Vii • Market Value Analysis Report City of Brooklyn Center, Minnesota Tax Increment Financing District (Renewal & Renovation) Brookdale Mall Redevelopment Project (Shingle Creek Crossing) TIF Plan Scenario R &R District - $61.38M EMV - 3 year build -out Assumptions Present Value Date 07/30/11 P.V. Rate - Gross T. 1. 5.00 % Increase in EMV With TIF District $48,731,797 Less: P.V of Gross Tax Increment 7,342,481 Subtotal $41,389,316 Less: Increase in EMV Without TIF 0 Difference $41,389,316 Annual Present Gross Tax Value @ Year Increment 5.00% 1 2013 7,290 6,558 2 2014 303,306 259,850 3 2015 754,285 615,443 4 2016 842,930 655,020 5 2017 842,930 623,829 6 2018 842,930 594,123 7 2019 842,930 565,831 8 2020 842,930 538,887 9 2021 842,930 513,225 10 2022 842,930 488,786 11 2023 842,930 465,511 12 2024 842,930 443,343 13 2025 842,930 422,232 14 2026 842,930 402,126 15 2027 842,930 382,977 16 2028 842,930 364,740 $12,022,971 $7,342,481 • Springsted Page 22 Exhibit Vlll Shingle Creek Crossing TIF District Projected TIF District Cash Flow and Debt Repayment REVENUE EXPENDITURES Annual Calendar Projected Tax Admin Exp Pay-As- ou Go Note Pa ments Projected Interfund Loan Repayments Reimb Other Pooled Exp Surplust Year Ending Increment I 10% TI Principal Interest Total P &I Principal Interest Total P &I Indistrict Exp 10% TI (Deficit) 1 (2) (3) (4 ) (5) (6) ) (8) (9) (10) (11) (12) 12131/2011 0 0 0 0 0 0 0 0 12131/2012 0 0 0 0 0 0 0 0 12/31/2013 7,264 726 0 6,538 6,538 0 0 0 12/31/2014 302,214 30,221 0 271,983 271,993 0 0 0 12/31/2015 751,570 75,157 335,491 340,922 676,413 0 0 0 12131/2016 839,895 83,990 391,857 112,080 503,937 0 251,969 (0) 12131/2017 839,895 83,990 415,721 88,215 503,937 0 251,969 (0) 12/31/2018 839,895 83,990 441,039 62,898 503,937 0 251,969 (0) 12/31/2019 839,895 83,990 467,898 36,039 503,937 0 251,969 (0) 12/31/2020 839,895 83,990 247,994 7,544 255,538 0 0 0 500,367 0 12/31/2021 839,895 83,990 0 0 0 0 0 0 755,905 0 12131/2022 839,895 83,990 0 516,905 516,905 239,000 0 12131/2023 839,895 83,990 0 556,243 556,243 199,662 0 12/31/2024 839,895 83,990 381,390 174,852 556,243 199,662 0 12131/2025 839,895 83,990 475,498 80,744 556,243 199,662 0 1213112026 839,895 83,990 494,518 61,724 556,243 199,662 0 12131/2027 839,895 83,990 514,299 41,944 556,243 199,662 0 12131/2028 839,895 83,990 534,294 21,372 555,666 199,662 577 11,979,683 1,197,974 2,300,000 926,228 3,226,228 2,400,000 1,453,784 3,853,784 2,503,146 1,197,974 (2) Projected Tax Increment revenue is net of State Auditor deduction of 0.36% (3) Administrative Expenditure is 10% of annual revenue in column (2) (4), (5), (6) Pay As You Go Note Payments represent payments on principal amount of $2.3M accruing interest at 6%, unpaid interest accrues without interest Available increment to service pay -go is 90% in the first 3 years (2013- 2015), 60% thereafter until retired (7), (8), (9) - Anticipated repayment to City /Authority for interfund loan of $2,400, 000 for land acquisition, assumed interest rate is 4% accruing from 12/3112011 (10) The TIF Plan authorizes an approximate $1.831M of additional indistrict expenditures, amount shown includes interest repayment of $671,455 (11) Pooled Expenditure is delayed until indistrict expenditures are complete, to total 10% of total tax increment (TI) in column (2) (12) The annual surplus/(deficit) subtracts totals in columns (3), (6), (9), (10) and (11) from the T/ Revenue in column (2) If expenditures In col. (10)-& (11) do not occur, but the projected revenue In col, (2) and debt of $2.3 M and $2.4 M each occur as projected, the district could close in year underlined (2023), 5 years prior to statutory decertification. The available funds in the district would retire the pay- as- you-go note and repay the Interfund Loan early. UP Spri-n9sted Page 23 Public Sector Advisors AR, kL q e �� } *,,, Saw- �I Springsted City of BROOKLYN CENTER Tax Increment Financing Plan for Tax Increment Financing District No. 5 A Renewal and Renovation District Shingle Creek Crossing Project February 28, 2011 PRESENTER: Jenny Wolfe, Senior Project Manager i Public Sector Advisors Springsted Purpose of TIF Plan • Provides statutory authorization to use tax increment financing • Contents of TIF Plan and terminology required by State Statute • TIF Plan based on assumptions of redevelopment • TIF Plan is not a commitment to provide subsidy (Plan provides framework only) • Recommend Plan with maximum flexibility Public Sector Advisors $pl'lI1CJSt2d Statutory Requirements of the TIF Plan • A statement of objectives for the improvements of the project; • A statement of any property the Authority intends to acquire; • A list of the development activities and expected � timing; • Estimated cost of the project to be paid or financed with tax increments from the District; • Estimated amount of bonds to be issued; Public Sector Advisors _ $pfIflCJSt2Cl Statutory Requirements of the TIF Plan (Cont'd) • Estimate of the original net tax capacity (ONTC); • Estimate of captured net tax capacity (CNTC) at completion; • Estimate of duration of TIF District; • Statement of alternate impacts; • Identification of all parcels within the TIF District; • Estimate of fiscal and economic implications of the proposed TIF District. Public Sector Advisors 011i Springsted Municipality Findings • That the proposed area qualifies as a Renewal and Renovation TIF District; • That the proposed redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; • That the increase in market value that could reasonably expected ected to p occur without the use of TIF would be less than the increase from the proposed development after subtracting the present value of the projected tax increments; • That the TIF plan conforms to the general plan of the City; • That the tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise. Public Sector Advisors Springsted Parcels within the TIF District School Parcel ID: District Address Partial Legal Description 02- 118 -21 -32 -0017 #281 1108 Brookdale Center Reg. Land Survey No. 1766, Tract A 02- 118 -21 -32 -0014 #281 1200 Brookdale Center Reg. Land Survey No. 1710, Tract B 02- 118 -21 -32 -0009 #281 1265 Brookdale Center Reg. Land Survey No. 1469, Tract C 02- 118 -21 -32 -0010 #281 1265 Brookdale Center Reg. Land Survey No. 1469, Tract D 02- 118 -21 -32 -0011 #281 1100 Brookdale Center Reg. Land Survey No. 1469, Tract E 02- 118 -21 -23 -0021 #281 No address Reg. Land Survey No. 1469, Tract A 02- 118 -21 -23 -0023 #281 1150 Brookdale Center Reg. Land Survey No. 1710, Tract C 02- 118 -21 -31 -0055 #286 2501 County Road No. 10 Reg. Land Survey No. 1614, Tract A Public Sector Advisors 6 Springsted Housing Development and Redevelopment Project No. 01 M a * -% of TIF Project Areas ILLLLItLL6 6 l 04 t.I,ILL � 1LI i LLLL t;,4t6L0 ;1 Ll.c I I. t I District and • / s c z r, F c 1, ir - Project Area cP -. sly E' a S Y IWY { ! Legend Pfgect Area Bounaary TIF ` Pwccs t� r a ice, I Public Sector Advisors 7 S pringsted Renewal and Renovation District • Qualifications — Improved parcels make up at least 70% of the district. — More than 20% of the buildings (excluding outbuildings) are structurally substandard to a degree requiring substantial renovation or clearance. — A building is not considered substandard if it could be brought up to code at a cost of less than 15% of a comparable new building on that parcel. — More than 30% of the other buildings (excluding outbuildings) require substantial renovation or clearance to remove existing conditions Public Sector Advisors 8 Springsted Renewal and Renovation Determination • City retained Alden Associates Architectural Services to survey and evaluate the properties within the proposed TIF District. • Alden Associates Architectural Services independently ascertained that the qualification tests for tax increment eligibility, as required under Minnesota Statute, could be met for a Renewal and Renovation District. i II I_ Public Sector Advisors - $pfIflCJSt @d Renewal and Renovation Determination • There are eight (8) parcels within the District; • Four (4) buildings on 5 parcels, and 4 parcels with paving improvements; • Finding - 100% of the parcels met the coverage test (more than 15% of parcel improved) with a collective 88.5% area coverage - Exceeds 70% area coverage requirement Public Sector Advisors P Springsted Renewal and Renovation Determination • Of the four buildings: — One (25 %) is structurally substandard —Mall building — One of remaining three buildings (33 %) requires substantial renovation or clearance to remove existing conditions — JC Penney building — Other buildings include Macy's and Mervyn's —level of deficiencies not sufficient to qualify Public Sector Advisors ,, Springsted Renewal and Renovation Determination • Mall building found to be structurally substandard — Significant deficiencies exist justifying substantial renovation or clearance — Not in compliance with building code applicable to new buildings and the estimated cost to modify the building to satisfy current code is more than 15% of the cost to construct a new building i Public Sector Advisors $pCIf1CJSt @d Renewal and Renovation Determination • JC Penney building found to require substantial renovation or clearance when considering significant health and safety deficiencies and overall obsolescence, rendering the building not suitable for improvement or conversion — Significant deficiencies exist justifying substantial renovation or clearance — Not in compliance with building code applicable to new buildings and the estimated cost to modify the building to satisfy current code is more than 15% of the cost to construct a new building Public Sector Advisors 13 Springsted Proposed Development • Proposed Project redevelops Brookdale Mall, excluding the Sears department store, demolishing three anchors and all but 123,242 s.f. of the mall space • Once complete the Project is expected to include total retail space of 513,376 s.f. as follows -- - a Walmart Supercenter (152,036 s.f.), — three junior anchors (120,735 s.f.), — three restaurant pads (21,393 s.f.), — six retail stores (95,970 s.f.), — 123,242 s.f. of renovated mall space • Total estimated market value is approximately $61.8 million (City estimate) Public Sector Advisors I .s Springsted Captured Tax Increment • Property taxes generated by the parcels within the District prior to certification of the TIF District continue to flow to individual taxing jurisdictions (e.g. City, County, ISD). • Increased market value within the TIF District is captured to generate tax increment based on the tax rate in place when the TIF District is certified • Renewal and Renovation TIF District maximum term is 16 total years (15 years after receipt of first increment) • Estimated first year is 2013 and final year is 2028 Public Sector Advisors Springsted Captured Tax Increment (Cont'd) • Estimated Market Value of all property within TIF District is $12,645,000 as of January 2, 2010, for taxes payable in 2011 - estimated original net tax capacity (ONTC) of the TIF District is $248,210 • Estimated Market Value of District when redeveloped is $61.8 million generating $1,234,573 of net tax capacity Public Sector Advisors c $pl'It1CJSt @d Captured Tax Increment (Cont'd • Gatlin Development Company expects to complete the development within three years as follows: — Walmart, approx. 40,000 s.f. of retail, one junior box of approx. 53,850 s.f - expected to be 100% complete in 2012 and assessed January 2, 2013 for taxes payable 2014; — Renovated 123,242 s.f. in the mall, approx. 55,970 s.f. of retail, two junior boxes of 66,885 s.f. and approx. 6,000 s.f. of restaurant - expected to be 100% complete in 2013 and assessed January 2, 2014 for taxes payable 2015; and — Remaining two restaurant pads of 15,360 s.f. - expected to be 100% complete in 2014 and assessed January 2, 2015 for taxes payable 2016; • The increased market value of $49.2 million ($61.8M minus $12.6M) is estimated to generate captured tax capacity of $635,968, after reduction for fiscal disparity Public Sector Advisors 17 Springsted I i Captured Tax Increment (Cont'd • Captured net tax capacity (CNTC) of $635,968 generates annual net tax increment of $846,768 beginning in tax year 2016 When utilizing following tax rates Tax Rate Payable 2010 For parcels located within For parcels located within Taxing Jurisdiction Robbinsdale SD Brooklyn Center SD City of Brooklyn Center 52.41% 52.41% Hennepin County 42.64% 42.64% ISD #281 (Robbinsdale) 28.62% NA ISD #286 (Brooklyn Center) NA 51.17% Other 8.22% 8.22% Total Tax Rate 131.89% 154.44% Public Sector Advisors ® Springsted Captured Tax Increment (Cont'd) • Estimated tax increment uses tax rates for payable 2010 (all that was available at the time the TIF Plan was first prepared) • County Auditor will certify original tax capacity rate of District applicable to taxes payable year that matches original net tax capacity, whenever available. — If certification requested prior to June 30, the original tax capacity and tax rate will be for taxes payable in 2011; — If certification requested after June 30, the original tax capacity and tax rate will be for taxes payable in 2012. Public Sector Advisors $pCIf1CJSt2d Tax Increment Projections for TIF Plan The estimated total tax increment is $12,229,125, as shown below Less: Less: Retained Total Less: Total Annual Total Original Fiscal Captured Annual State Aud. Net Period Net Tax Net Tax Disp. @ Net Tax Gross Tax Deduction Increment Ending Capacity Capacity 35.5239% Capacity Increment 0.360% to Authority 2012 12/31/12 248,210 248,210 0 0 0 0 0 2013 12/31/13 267,187 248,210 6,741 12,236 16,139 58 16,081 2014 12/31/14 777,786 248,210 188,126 341,450 456,601 1,644 454,957 2015 12/31/15 1,120,492 248,210 309,869 562,413 752,813 2,710 750,103 2016 12/31/16 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2017 12/31/17 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2018 12/31/18 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2019 12/31/19 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2020 12/31/20 1,234, 573 248,210 350,395 635,968 849,827 3,059 846,768 2021 12/31/21 1,234, 573 248,210 350,395 635,968 849,827 3,059 846,768 2022 12/31/22 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2023 12/31/23 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2024 12/31/24 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2025 12/31/25 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2026 12/31/26 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2027 12/31/27 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 2028 12/31/28 1,234,573 248,210 350,395 635,968 849,827 3,059 846,768 $12,273,304 $44,1791 $12,229,125 Public Sector Advisors Springsted District Restrictions • At least 90% of increment must be used to finance the costs of correcting conditions that allow designation of a renewal and renovation district. • These costs include but are not limited to: • Acquiring properties containing structurally substandard buildings; • Demolition and rehabilitation of structures; • Clearing of the land, the removal of hazardous substances or remediation necessary to development of the land; • Installation of utilities, roads, sidewalks, and parking facilities for the site; •Allocated administrative expenses of the authority may be include Public Sector Advisors $pCI11CJSt2d District Restrictions (Cont'd) • Not more than 20% of the total revenue derived from tax increments paid by properties in district may be expended on activities outside of the district but within the defined geographic area of the project (Housing Development and Redevelopment Project No. 1) • Administration expenditures are included within the 20% — Allows 10% of tax increments for expenditures outside the TIF district but within the Project area or five years after certification Public Sector Advisors $pCI11CJSt2d Typical Eligible Costs • Public Improvements (streets, sidewalks, utilities, parking) • Acquisition • Soil Correction • Site Preparation/Demolition • Relocation • Financing Fees /Capitalized Interest • Administrative Costs (10 %) Public Sector Advisors � � Springsted Estimated Public Costs shown in TIF Plan Expenditure Budget Land /Building acquisition $1,000,000 Site improvement/prep costs 3 Parking Facilities 0 Streets and Sidewalks 0 Installation of Public Utilities 0 Loan /Note /Bond Interest Payments 2,875,000 Administrative expenses 1 Other Expenditures Bond Issuance Costs — Admin 39,000 Capitalized Interest payments 295,000 EDA Identified Public Impr —Within TIF District 2,434,000 EDA Identified Public Impr— Outside TIF District 1,223,000 Total Expenditures $12,350,000 Public Sector Advisors Springsted Estimated Revenues and Bonded Indebtedness • The Authority reserves the right to finance any or all public costs of the TIF District using -- - pay -as- you -go assistance, — internal funding, — general obligation or revenue debt, or 9 g — any other financing mechanism authorized by law including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income • The Authority anticipates issuing general obligation TIF bonds and executing internal borrowing from allowable general funds of the Authority and /or City to finance a portion of the public costs. • The Authority and City reserve the right to issue such bonds includes internal borrowing) in an amount not to exceed 9,000,000 (maximum indebtedness of the TIF District). Public Sector Auvisors Springsted Anticipated Financings • The Authority anticipates issuing general obligation TIF bonds to finance $2.3 million of site improvement/prep costs and borrowing funds from TIF No. 2 to finance $1 million of acquisition and $1 million of site improvement/prep costs • The specifics will be outlined in a future Development Agreement (for discussion at a future work session) • The projected tax increment generated by the proposed new TIF District is expected to repay the debt service on the GO bonds and the borrowed funds from TIF No. 2 within the maximum duration of the TIF district Public Sector Advisor_ 7s Springsted Anticipated Financings (Cont'd) • The Authority reserves the right to spend additional monies generated by the TIF district on EDA approved public improvements within and outside the TIF district boundaries, as permitted under the statute Public Sector Advisors 27 r[� Springsted Estimated Revenues in TIF Plan i Revenue Budget Tax Increment revenue* $12,230,000 Interest on invested funds 120,000 Bond proceeds 0 Loan proceeds 0 Other Revenues 0 Developer Shortfall Payments 0 Total Revenue $12,350,000 * Net of State Auditor Deduction Public Sector Advisors 28 Springsted mat E tiCash Flow with Bond Debt Service s ed REVENUE EXPENDITURES Annual Calendar Projected Tax Admin Exp Pooled Exp Projected Net Debt Service GO TIF Bonds Projected Interfund Loan Repayments Reimb Other Surplus/ Year Ending Increment (TI) 10% TI 10% TI Principal Interest Total P &I Principal Interest Total P &I Indistrict Exp (Deficit) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 12/31/2011 12/31 /2012 - - - - 12/31/2013 16,081 1,608 1,608 - - - - - 12,865 12/31/2014 454,957 45,496 45,496 135,000 126,194 261,194 56,000 56,000 46,772 12/31/2015 750,103 75,010 75,010 135,000 122,954 257,954 - 200,000 200,000 142,129 12/31/2016 846,768 84,677 84,677 140,000 119,174 259,174 15,778 184,222 200,000 218,241 12/31/2017 846,768 84,677 84,677 145,000 114,484 259,484 121,837 78,163 200,000 217,931 12/31/2018 846,768 84,677 84,677 150,000 109,264 259,264 126,760 73,240 200,000 218,151 12/31/2019 846,768 84,677 84,677 155,000 103,264 258,264 131,881 68,119 200,000 219,151 12/31/2020 846,768 84,677 84,677 165,000 96,676 261,676 137,209 62,791 200,000 215,738 12/31/2021 846,768 84,677 84,677 170,000 89,251 259,251 142,752 57,248 200,000 218,163 12/31/2022 --- - - - - -- 846,768 -- - - - - -- 84,677 ----- - - - - -- 84_677 -- - - - - -- 180,000 --- - - - - -- 81,176 -- - - - - -- 261_176 - -- - -- 148,519 --- - - - - -- 51 481 200,000 216,238 - ---------- - - -- - - -- -------- - -- --- -------- ---- -- -- -- ------------------ 12131/2023 846,768 84,677 84,677 190,000 72,176 262,176 154,519 45,481 200,000 215,238 12/31/2024 846,768 84,677 84,677 195,000 62,201 257,201 160,762 39,238 200,000 220,213 12/31/2025 846,768 84,677 84,677 210,000 51,720 261,720 167,257 32,743 200,000 215,694 12/31/2026 846,768 84,677 84,677 220,000 40,170 260,170 224,514 25,486 250,000 57,477 109,767 12/31/2027 846,768 84,677 84,677 230,000 27,795 257,795 233,584 16,416 250,000 169,619 12/31/2028 1 846,768 84,677 84,677 245,000 14,455 259,455 234,629 6,979 241,608 1 176,352 12,229,125 1,222,913 1,222,913 2,665,000 1,230,954 3,895,954 2,000,000 997,608 2,997,608 2,434,000 455,738 (2) Projected Tax Increment revenue is net of State Auditor deduction of 0.36% (3) Administrative Expenditure is 10% of annual revenue in column (2) (4) Pooled Expenditure is 10% of annual revenue in column (2) (5) Projected GO Bonds issued for $2,665, 000 to produce $2.3 M for site improvement/prep costs, balance includes capitalized interest, underwriter discount and costs of issuance (6) Net debt service does not include interest paid with bond proceeds (capitalized) (7) Total net debt service adds (5) & (6) (8), (9), (10) - Anticipated repayment to City/Authority for interfund loan of $2,000, 000 for land acquisition /site improvement/prep costs, assumed interest rate is 4% (11) The TIF Plan authorizes $2.434M of additional indistnct expenditures. (12) The annual surplus/(deficit) subtracts totals in columns (3), (4), (7), (10) and (11) from the TI Revenue in column (2) If expenditures in col. (4) & (11) do not occur & revenue/debt occur as projected, the district could close in year underlined (2022), 6 years prior to statutory decertification The available funds in the district would be able to prepay both the GO TIF Bonds and Interfund Loan Repayments Public Sector Advisors Springsted Cash F Notes • Col. 3 - Administrative Expenditure is 10% of annual TI revenue • Col. 4 - Pooled Expenditure is 10% of annual TI revenue • Col. 5, 6, 7 - Projected GO Bonds issued for $2,665,000 to produce $2.3 M for site improvement/prep costs, balance includes capitalized interest, underwriter discount and costs of issuance • Col. 8, 9, 10 - Anticipated repayment to City /Authority for interfund loan of $2,000,000 for land acquisition /site improvement/prep costs, assumed interest rate is 4% • Col. 11 - TIF Plan authorizes $2.434M of additional in- district expenditures • If expenditures in col. (4) & (11) do not occur & revenue /debt occur as projected, the district could close in year underlined (2022), 6 years prior to statutory decertification Public Sector Advisors Springsted Municipal Findings But For • The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. — The proposed development consists of approximately 513,000 s.f. of retail uses constructed by the Developer, Gatlin Development Company. — The Developer has indicated they will begin construction of the proposed project only if the Authority can provide public assistance, due to extensive redevelopment costs and the speculative nature of the retail. Public Sector Advisors 3 1 Springsted i g Municipal Findin s Increased Market Value • The increased market value of the site that could reasonably be expected to occur without the use of tax increment ($0) would be less than the increase in market value estimated to result from the proposed development ($49.2M) after subtracting the present value of the projected tax increments ($7.5M) for the maximum duration of the TIF District permitted by the TIF Plan ($41.6M). - Detail follows. Public Sector Advisors 32 Springsted Municipal Findings Increased Market Value Assumptions Present Value Date 07/30/11 P.V. Rate - Gross T.I. 5.00% Increase in EMV With TIF District $49,158,660 Less: P.V of Gross Tax Increment 7,533,433 Subtotal $41,625,227 Less: Increase in EMV Without TIF 0 Difference $41,625,227 Annual Present Gross Tax Value @ Year Increment 5.00% 1 2013 16,139 14,518 2 2014 456,601 391,182 3 2015 752,813 614,242 4 2016 849,827 660,380 5 2017 849,827 628,933 6 2018 849,827 598,984 7 2019 849,827 570,461 8 2020 849,827 543,296 9 2021 849,827 517,425 10 2022 849,827 492,785 11 2023 849,827 469,319 12 2024 849,827 446,971 13 2025 849,827 425,687 14 2026 849,827 405,416 15 2027 849,827 386,110 16 2028 849,827 367,724 $12, $ 7,533,4 33 Public Sector Advisors 33 Springsted Municipal Findings C ont d • The TIF Plan conforms to general plans for development of the City as a whole. — The City Planning Commission has or will determine that the development proposed in the TIF Plan conforms to the City comprehensive plan. • The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for redevelopment of the TIF District area by private enterprise. — The anticipated redevelopment projected by the Developer includes a mix of retail uses and substantial site improvements consistent with the City's design goals. Public Sector Advisors ® Springsted Hypothetical Tax Impact Without Project or TIF District With Project and TIF District Projected Hypothetical 2009/2010 2009/2010 Retained New Hypothetical Hypothetical Tax Generated Taxable 2009/2010 Taxable Captured Taxable Adjusted Decrease In by Retained Taxing Net Tax Local Net Tax Net Tax Net Tax Local Local Captured Jurisdiction Capacity (1) Tax Rate Capacity (1) + Capacity = Capacity Tax Rate () Tax Rate (`) N.T.C. ( ") City of Brooklyn Center 17,960,128 52.412% 17,960,128 $635,968 18,596,096 50.620% 1.792% 321,924 Hennepin County 1,439,645,193 42.640% 1,439,645,193 $635,968 1,440,281,161 42.621% 0.019% 271,057 ISD #281 (Robbinsdale) 88,612,938 28.621% 88,612,938 $587,034 89,199,972 28.433% 0.188% 166,909 ISD #286 (Brooklyn Center) 5,691,835 51.173% 5,691,835 $48,934 5,740,769 50.737% 0.436% 24,828 Other (2) - -- 8.219% - -- $635,968 - -- 8.219% - -- Totals ISD #281 131.892% 129.892% 2.000% ISD #286 154.444% 152.197% 2.247% Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above, the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax rate would decrease by 2.000% (see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, 1 P Y then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity = total net tax capacity - captured TIF - fiscal disparity contribution, if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 6.23% of the total tax rate. Public Sector Advisors SpringSted . Fiscal and Economic Implications • The TIF Plan needs to include a description of the pr obable impact of the district on city - provided services such as police and fire protection, public infrastructure, and the impact of any general obligation tax increment bonds - - City does not expect to have significant impact to city provided services such as police and fire protection resulting from the establishment of the TIF district and the eventual redevelopment of the project site. — City expects to incur public infrastructure costs related to the project and fund those costs directly from the TIF district revenues. — City plans on issuing general obligation tax increment revenue bonds and recognizes that the planned bond issue will not materially impact the City's future ability to issue other debt for general fund purposes. Public Sector Advisors ": Springsted Fiscal and Economic Implications (Cont'd • Total tax increment generated over the life of the district is estimated to be $12,273,304 (before State Auditor deduction) • Amount of tax increments over the life of the district that would be attributable to each taxing entity assuming their local tax rate remained the same - - $364,768 estimated for Brooklyn Center school district - $2,424,449 estimated for Robbinsdale school district - $3,915,924 estimated for Hennepin county - $4,813,353 estimated for City of Brooklyn Center • The Authority /City believe the amounts detailed above would not be generated since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. Public Sector Advisors SpringSted Questions Jenny Wolfe, Senior Project Manager 651 - 223 -3085 Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Public Sector Advisors a Springsted City Council Agenda Item No. 9a COUNCIL ITEM MEMORANDUM DATE: March 28, 2011 TO: Curt Boganey, City Manager FROM: Gary- Eitel, Director of Business and Development .+ _ D Amendment r PU Am e t SUBJECT: .Planning Commission .Application No. 2011-006 (Request fo approval to Rezone 1700 Freeway Boulevard from I -1 (Industrial) to PUD/I -1 (Planned Unit Development/Industrial) to Facilitate an Expansion of the Parking Lot and Repurposing of this Industrial ,Building from Warehousing to Manufacturing Recommendation: It is recommended that the City Council, following consideration of this matter, approve the Resolution Regarding the disposition of Planning Commission Application No. 2011 -006 Submitted by Todd Shaw for Precision Machine, Inc. (1700 Freeway Boulevard). Background: On January 27, 2011, the Planning Commission considered the potential relocation of an existing Brooklyn Center manufacturing use into the vacant industrial building at 1740 Freeway Boulevard and the possible use of the Planned Unit Development ordinance to establish flexibility in allowing the expansion of the existing one -way angled parking (accessed from Freeway Boulevard) to a double sided parking lot with a relocation of the driveway unto James Avenue. The discussion at that time included considerations to preserving the existing boulevard trees and the possible use of parking lot materials that would not increase the rate of storm water runoff. On February 17, 2011, the Planning Commission unanimously moved to recommend conceptual approval which allowed an expansion of the parking lot that encroached upon the standard 15 foot front yard setback with the use of rain gardens within the James Avenue North/ boulevard to address storm water runoff. On March 17, 2011, the Planning Commission conducted a public hearing on Planning Commission Application No. 2011 -006 submitted by Todd Shaw for Precision Machine, Inc. a request for PUD Amendment approval to rezone 1700 Freeway Boulevard from I -1 (Industrial) to PUD /I -1 (Planned Unit Development/Industrial) to Facilitate an Expansion of the Parking Lot and Repurposing of this Industrial Building from Warehousing to Manufacturing. At the public hearing, the applicant informed the Planning Commission that Precision Machine, Inc. has been a Brooklyn Center business since the 1950's. They presently lease approximately 20,000 sq. ft. within the multi- tenant industrial building at 1800 Freeway Boulevard and operate two shifts with approximately 100 employees. The growth of the company requires an expansion of their facilities and the opportunity to acquire and repurpose the 45,000 sq. ft. office/warehouse building at 1700 Freeway Boulevard, Mission: Ensuring an dttrac Live, clean, safe conunun4 that enhances the palih of life and preserves the public trust COUNCIL 'ITEM MEMORANDUM enables Precision Machine, Inc. to accomplish their business plan and desire to stay and grow within the City of Brooklyn Center. Attached for your review are copies of the Planning Commission Information Sheet for Application No. 2011 -006, an area location map and the Planning Commission minutes. Budget Issues: There are no budget issues to consider. Council Goals: Strategic: 2. We will aggressively proceed with implementation of City's redevelopment plans Ongoing: 2. We will ensure the financial stability of the City Mission: Ensuring an attractive, clean, safe conumnity that enhances the quality of life and preserves the public trust . Application Filed on 2 -18 -10 City Council Action Should Be Taken By 4 -19 -10 (60 Days) Planning Commission Information Sheet Application No. 2011 -006 Applicant: Todd Shaw on behalf of Precision Incorporated Location: Northeast Quadrant of Freeway Boulevard and James Avenue North (1700 Freeway Boulevard) Request: Rezoning Approval to Establish a PUD to Facilitate an Expansion of the Parking Lot and Repurposing of this Industrial Building from Warehousing to Manufacturing The applicant, Todd Shaw, on behalf of Precision, Inc. is seeking to rezone Lot 1, Block 1, Interchange Addition, from I -1 to PUD /I -1 as part of the redevelopment/renovation plans for this existing 45,000 sq. ft. industrial building and expansion of its parking lot. BACKGROUND INFORMATION On January 27, 2011, the Planning Commission considered the potential relocation of an existing Brooklyn Center manufacturing use into the vacant industrial building at 1700 Freeway Boulevard and the possible use of the Planned Unit Development ordinance to establish . flexibility in allowing the expansion of the existing one -way angled parking (accessed from Freeway Boulevard) to a double sided parking lot with a relocation of the driveway unto James Avenue. The discussion at that time included considerations to preserving the existing boulevard trees and the possible use of parking lot materials that would not increase the rate of storm water runoff. On February 17, 2011, the Planning Commission unanimously moved to recommend conceptual approval which allowed an expansion of the parking lot that encroached upon the standard 15 foot front yard setback with the use of rain gardens within the James Avenue North/ boulevard to address storm water runoff. ZONING This site is zoned I -1 (Industrial Park) and is indentified on the City's Comprehensive Plan as part of the City's 694 industrial area. This 2.77 acre site was developed in 1969 as part of an industrial development, known as Freeway Commerce Center. PLANNED UNIT DEVELOPMENT PROVISIONS / STANDARDS Section 35 -355 of the Zoning Ordinance provides for Planned Unit Developments (PUD) to promote flexibility in land development and redevelopment, preserve aesthetically significant and environmentally sensitive site features, conserves energy and ensures a high quality of design. 3.17 -11 Page 1 The proposed use of a PUD allows the use of perimeter setback standards to provide green and open space from the existing neighborhood, flexibility in the location of interior lot lines, parking and structured parking setbacks, and the ability to deviate from the dedication of the standard side yard drainage and utility easements. The following minimum I -1 development standard is being requested to be modified to facilitate the expansion of the parking lot: • Parking setback from James Avenue North —15 ft. to approximately 6 ft. e e for each two The parking ratio used is for Indus and wholesale buildings and is on spat P g �' employees on a major shift or one per 800 sq. ft. of gross building area, whichever is greater. The ordinance requirement for this building is 56 parking stalls. PUD APPLICATI ©N AND REVIEW PROCESS The PUD provisions require that a development include sufficient information and details which allows the evaluation of the plans to address the following criteria: - 1. Compatibility of the plan with the standards, purposes and intent of the PUD ordinances. 2. Consistency of the Plan with the goals and policies of the Comprehensive Plan. 3. The impact of the Plan on the neighborhood in which it is to be located. 4. The adequacy of internal site organization, uses, densities, circulation, parking facilities, public facilities, recreational areas, open spaces, buffering, and landscaping. Attached for you review is a copy of development plan/site plan which illustrates the proposed expansion of the parking lot and relocation of the Freeway Boulevard entrance driveway to James Avenue. The plan illustrates how a maximum of 123 parking stalls could be accommodated on the lot, assuming a conversion of a significant portion of the rear loading area is used for parking. Precision Incorporated is currently operating as a tenant in approximately 20,000 sq. ft. of the 1800 Freeway Boulevard industrial building. A meeting with the applicant indicates tha t they have been a Brooklyn Center business for approximately 50 years during which their Transformer Manufacturing business has grown to 100 employees and has approximately $20M in production. They currently operate two shifts and believe that their business is well positioned to more than double in the foreseeable future. The building at 1700 Freeway Boulevard is a 45,000 sq.ft. building and with the expanded parking will facilitate their needs and desire to stay and grow in the City of Brooklyn Center. 3 -17 -11 Page 2 RECOMMENDATION It is recommended that a motion be made to approve Planning Commission Application No. 2011 -006 by adoption of Planning Commission Resolution No. 2011 -03 subject to the following conditions: 1. Execution of a PUD development agreement as prepared by the City Attorney. 2. Approval of a grading and planting plan for the rain gardens by the City Engineer. 3. 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NO LIM 17 517 PLAN A - 7� PORATED, opols, MN 55430 #r� R SITE / BUILDING INFORMATION $e AMA . W" VATS arm WLM AM 40W U. an4�t aaar•�o . �,at e� } mum • tw SF aR Ao WW. . tM V rat d MNUVp M(e 1, ben 0) • 50 Stave ' WU AWA r.4 . Yes 6P) . 63 STALLS PALM PWM • i STALLS PAlaCN RVWM • Gi a" fiYPkN Si/LLSIi0Y116l Xfr-w owoolma► lit: t } 0 MUM tOt. MglMM611OHI tlC1iCt1 €F y YMim NN lumm LL11 IL CIIgJS1Y tl�Li�Yt b t)MA) . M omwawaaa ismi-MY �: ALTiOFMlt7MlXY. ii' so= �leKP00t e�weeien aRtetll�le6Tlnte! � �.� euet M 'JN.xw o m. a . AD! tvAm� SMK*#M 9 rm aeteagdco OR CATCW B" LOMMUNSUM rwvLLCw L ,, "Mm d am CAZI am FS onimumsox PI�t - 6KldIt9AlfUY'OGIgMN - '. ,' aeftta�euauenrXOtatemm� PIP ■ Clf.1MIJOG110t�fMI@U17f W NXOt A"ADIgtIllUEt 5-6 AIL RUC=N.6 WTI&=.N Member Kuykendall introduced the following resolution and moved its adoption: PLANNING COMMISSION RESOLUTION NO. 2011 -03 RESOLUTION REGARDING THE, RECOMMENDED DISPOSITION OF PLANNING COMMISSION APPLICATION NO. 2011 -006 SUBMITTED BY TODD SHAW FOR PRECISION MACHINE, INC WHEREAS, Planning Commission Application No. 2011 -006 submitted by Todd Shaw for Precision Machine, Inc. proposes rezoning from I -1 (Industrial Park) to PUD/I -1 (Planned Unit Development/Industrial Park) of a 2.77 acre lot; and - WHEREAS, the proposal comprehends the rezoning of the above mentioned property and renovation and repurposing of a 45,000 sq.ft. industrial/warehouse building and expansion of its parking lot; and WHEREAS, the Planning Commission held a duly called public hearing on March 17, 2011 when a staff report and public testimony regarding the rezoning and development plan were received; and WHEREAS, the Planning Commission considered the Planned Unit Development request in light of all testimony received, the guidelines for evaluating rezonings contained in Section 35 -208 of the City's Zoning Ordinance, the provisions of the Planned Unit Development ordinance contained in Section 35 -355 of the City's Zoning Ordinance and the City's Comprehensive Plan. NOW, THEREFORE, BE IT RESOLVED by the Planning Advisory Commission of the City of Brooklyn Center to recommend to the City Council that Application No. 2011 -006 submitted by Todd Shaw for Prevision Machine, Inc. be approved based upon the following considerations: 1. The Planned Unit 'Development is compatible with the standards, purposes and intent of the Planned Unit Development section of the City's -Zoning Ordinance. 2. The Planned Unit Development proposal will allow for the utilization of the land in question in a` manner which is compatible with, complimentary to and of comparable intensity to adjacent land uses as well as those permitted on surrounding land. 3. The utilization of the property as proposed under the Planned Unit Development Rezoning is considered a reasonable use of the property and will conform with ordinance standards except for the parking setback along James Avenue.. These modifications from the I -I standards are justified on the basis of the development being an appropriate renovation and industrial use for this area and that they are 1 • offset or mitigated by the public safety improvements of the closure of the Freeway Boulevard access and installation of rain gardens in the remaining boulevard of James Ave. 4. The Planned Unit Development proposal is considered consistent with the recommendations of the City's Comprehensive Plan for this area of the city. 5. The Planned Unit Development proposal appears to be a good long range use of the existing land and this development can be considered an asset to the community. 6. Based ;upon , the above considerations, it is believed that the guidelines for evaluating rezonings as contained in Section 35 -208 of the City's Zoning Ordinance are met and the proposal is, therefore, in the best interest of the community. BE IT FURTHER RESOLVED by the Planning Advisory Commission of the City of Brooklyn Center to recommend to the City Council that Application No. 2011 -006 be approved subject to the following conditions and considerations: 1. Execution of a PUD development agreement as prepared by the City Attorney. 2. Approval of a grading and planting plan for the rain gardens by the City Engineer. • 3. Closure of the driveway "entrance unto Freeway Boulevard and approval of a driveway permit for the James Avenue. Date Chair ATTEST: Secretary The motion for the adoption of the foregoing resolution was duly seconded by member Parks and upon vote,being taken thereon, the following voted in favor thereof Chair Rahn, Commissioners Kuykendall, Leino, Morey, Parks, and Schonning. and the following voted against the same: whereupon said resolution was:declared duly passed and adopted. 2 Member introduced the following resolution and moved its adoption: • RESOLUTION NO. RESOLUTION REGARDING THE DISPOSITION OF PLANNING COMMISSION APPLICATION NO. 2011 -006 SUBMITTED BY TODD SHAW FOR PRECISION MACHINE, INC. (1700 FREEWAY BOULEVARD) WHEREAS, Planning Commission Application No. 2011 -006 submitted by Todd Shaw for Precision Machine, Inc. proposes rezoning from I -1 (Industrial Park) to PUD/I -1 (Planned Unit Development/Industrial Park) of a 2.77 acre lot; and WHEREAS, the proposal comprehends the rezoning of the above mentioned property and renovation and repurposing of a 45,000 sq. ft. industrial/warehouse building and expansion of its parking lot; and WHEREAS, the Planning Commission held a duly called public hearing on March 17, 2011, when a staff report and public testimony regarding the rezoning and development plan were received; and WHEREAS, the Planning Commission recommended approval of Application No. 2011 -006 by adopting Planning Commission Resolution No. 2011 -03 on March 17, 2011; and WHEREAS, the City Council considered Application No. 2011 -006 at its March 28, 2011, meeting; and WHEREAS, the City Council considered the Planned Unit Development request in light of all testimony received, the guidelines for evaluating rezomngs contained in Section 35 -208 of the City's Zoning Ordinance, the provisions of the Planned Unit Development ordinance contained in Section 35 -355 of the City's Zoning Ordinance and the City's Comprehensive Plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, that Application No. 2011 -006 submitted by Todd Shaw, for Precision Machine, Inc be approved based upon the following considerations: 1. The Planned Unit Development is compatible with the standards, purposes and intent of the Planned Unit Development section of the City's Zoning Ordinance. 2. The Planned Unit Development proposal will allow for the utilization of the land in question in a manner which is compatible with, complimentary to and of comparable intensity to adjacent land uses as well as those permitted on surrounding land. 3. The utilization of the property as proposed under the Planned Unit Development Rezoning is considered a reasonable use of the property and will conform with ordinance standards except for the parking setback along James Avenue. These modifications from the I -1 standards are justified on the basis of the development being an appropriate renovation and industrial use for this area and that they are offset or • RESOLUTION NO. mitigated by the public safety improvements of the closure of the Freeway Boulevard access and installation of rain gardens in the remaining boulevard of James Ave. 4. The Planned Unit Development proposal is considered consistent with the recommendations of the City's Comprehensive Plan for this area of the city. 5. The Planned Unit Development proposal appears to be a good long range use of the existing land and this development can be considered an asset to the community. 6. Based upon the above considerations, it is believed that the guidelines for evaluating rezonings as contained in Section 35 -208 of the City's Zoning Ordinance are met and the proposal is, therefore, in the best interest of the community. BE IT FURTHER RESOLVED by the City Council of the City of Brooklyn Center that Application No. 2011 -006 be approved subject to the following conditions and considerations: I. Execution of a PUD development agreement as prepared by the City Attorney. 2. Approval of a grading and planting plan for the rain gardens by the City Engineer. 3. Closure of the driveway entrance unto Freeway Boulevard and approval of a driveway permit for the James Avenue. BE IT FURTHER RESOLVED by the City Council of the City of Brooklyn Center that staff is directed to proceed with an ordinance amending Chapter 35 of the City's Zoning Ordinance Regarding the Zoning Classification of Certain Land Lot 1, Block 1, Interchange Addition, (1700 Freeway Boulevard). March 28 2011 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. MINUTES OF THE PROCEEDINGS OF THE PLANNING COMMISSION • OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY SESSION MARCH 17, 2011 CALL TO ORDER The Planning Commission meeting was called to order by Chair Rahn at 7:07 p.m. ROLL CALL Chair Sean Rahn, Commissioners Kara Kuykendall, Stan Leino, Rachel Morey; Michael Parks, and Stephen Schonning were present. Also present were Secretary to the Planning Commission/Director of Business & Development, Gary Eitel, Planning and Zoning Specialist Tim Benetti, Councilmember Carol Kleven, City Manager Curt Boganey and Planning Commission Recording Secretary Rebecca Crass. Commissioner Carlos Morgan was absent and unexcused. APPROVAL OF MINUTES — MARCH 10 2011 There was a motion by Commissioner Morey, seconded by Commissioner Schonning,to approve the minutes of the March 10, 2011 meeting as submitted. The motion passed. CHAIR'S EXPLANATION Chair Rahn explained the Planning Commission's role as an advisory body. One of the Commission's functions is to hold public hearings. In the matters concerned in these hearings, - the Commission makes recommendations to the City Council. The City Council makes all fmal decisions in these matters. APPLICATION NO. 2011 -006 TOD SHAW FOR PRECISION MACHINE, INC. Chair Rahn introduced Application No. 2011 -006, a request for Planned Unit. Development approval to rezone 1700 Freeway Boulevard from I -1 (Industrial) to PUD/1 -1 (Planned Unit Development/Industrial) as part of the redevelopment/renovation plans for this existing 45,000 sq. ft. industrial building and expansion of its parking lot. Mr. Eitel presented the staff report and explained that on January 27, 2011, the Planning Commission considered the potential relocation of an existing Brooklyn Center manufacturing use into the vacant industrial building at 1700 Freeway Boulevard and the possible use of the Planned Unit Development ordinance to establish flexibility in allowing the expansion of the existing one -way angled parking (accessed from Freeway Boulevard) to a double sided parking lot with a relocation of the driveway unto James Avenue. The discussion at that time included considerations to preserving the existing boulevard trees and the possible use of parking lot materials that would not increase the rate of storm water runoff. Commissioner Parks arrived at 7:11 p.m. 3 -17 -11 Page 1 • He added that on February 17, 2011, the Planning Commission unanimously moved to recommend conceptual approval which allowed an expansion of the parking lot that encroached upon the standard 15, foot front yard setback with the use of rain gardens within the James Avenue North/ boulevard to address storm water runoff. PUBLIC HEARING — APPLICATION NO. 2011-006 There was a motion by Commissioner Morey, seconded by Commissioner Kuykendall, to open the public hearing on Application No. 2011 -006, at 7:16 p.m. The motion passed unanimously. Chair Rahn called for comments from the public. Mr. Todd Shaw, representing Precision Machine, Inca stated that the company has been in Brooklyn Center for over 50 years when the business was located near 50t and France as Cass Screw. At that time there were 15 employees and with the expanding business they now have 00 employees with 20,000 sq. ft. for industrial space and hope to double that with this move. No other persons from the public appeared before the Commission during the public hearing on Application No. 2011 -006. CLOSE PUBLIC HEARING There was a motion by Commissioner Kuykendall, seconded by Commissioner Morey, to close the public hearing on Application No. 2011-006, at 7 :17 p.m. The motion passed unanimously. The Chair called further discussion or questions from the Commissioners. Commissioner Parks asked for clarification about the drain tile within the rain garden treatment area. Mr. Eitel responded that the applicant took the initiative to suggest the rain garden i treatment which allows proper drainage and eliminates standing water on the site. H e added that the City Engineer will review and approve the plans prior to installation and that the intention is for water treatment not water retention. He added that there is percolation with this process that allows for drainage through the the system. Commissioner Leino arrived at 7:20 p.m. The Commissioners interposed no objections to approval of the Application. ACTION TO RECOMMEND APPROVAL OF PLANNING COMMISSION RESOLUTION NO. 2011:: -03 There was a motion by Commissioner Kuykendall, seconded by Commissioner Parks, to recommend to the City Council that it approve Planning Commission Resolution No. 2011 -03 regarding the recommended disposition of Planning Commission Application No. 2011 -006, submitted by Todd Shaw for Precision Machine, Inc. for Planned Unit Development Approval to rezone 1700 Freeway Boulevard from I -1 (Industrial) to PUD /I -1 (Planned Unit Development/ Industrial). • 3 -17 -11 Page 2 Voting in favor: Chair Rahn, Commissioners Kuykendall, Leino, Morey, Parks, and • Schonning. And the following voted against the same: None Whereupon said resolution as declared duly passed and adopted. Planning Commission Resolution 2011 -03 is made part of these minutes by attachment. The Council will consider the application at its March 28, 2011 meeting. The applicant must be present. Major changes to the application as reviewed by the Planning Commission will require that the application be returned to the Commission for reconsideration. APPLICATION NO. 2011-004 — LOREN VAN DER SLIK FOR GATLIN DEVELOPMENT COMPANY, INC. Chair Rahn introduced Application No. 2011 -004, a request from Loren Van Der Slik for Gatlin Development Company, Inc., for Preliminary Plat Approval of Shingle Creek Crossing, the replat of the Brookdale properties into four lots and two outlots to facilitate Phase I of the Shingle Creek Crossing PUD. Mr. Eitel explained that the replating of the Brookdale Mall properties, excluding the Sears, Midas and Kohl's parcels, is part of the first phase improvements and development of the Shingle Creek Crossing PUD. He added that the property is zoned PUDIC -2 (Commerce District) and is located within the City's Central Commerce (CC) Overlay District. Mr. Eitel stated that based on a review and report by the City Engineer, there are a number of issues which may involve changes to be made to the preliminary plat and should be addressed before a Planning Commission recommendation is forwarded to the City Council He described several easements on the site related to drainage, utilities, and trailways that are shown on the preliminary plat to be dedicated with the final plat. Mr. Eitel stated that it is Staff's recommendation that the Application be tabled and the public hearing continued at the March 31, 2011 meeting. Commissioner Leino stated that it appears that the previous legal showing Torrens and Certificate of Title doesn't show that the easements were properly laid out in the legal description and asked if through the replat are we dedicating new easements? Mr. Eitel stated that is correct and added all underlying easements on the plat will be vacated and the new public easements will be dedicated at that time. PUBLIC HEARING — APPLICATION NO. 2011-004 There was a motion by Commissioner Leino, seconded by Commissioner Morey, to open the public hearing on Application No. 2011 -004, at 7:42 p.m. The motion passed unanimously. Chair Rahn called for comments from the public. Mr. Frank Gatlin, representing Gatlin Development, introduced himself and asked if there are any questions from the Commissioners. 3 -17 -11 Page 3 • Commissioner Parks asked the applicant if they have had an opportunity to review the staff's recommendations. Mr. Gatlin responded that he and his team have been working with staff to assemble plans that will be approved at future meetings. No other persons from the public appeared before the Commission during the public hearing on Application No. 2011 -004. CLOSE PUBLIC HEARING There was a motion by Commissioner Kuykendall, seconded by Commissioner Leino, to close the public hearing on Application No 2011 -004, at 7:46 p.m. The motion passed unanimously. The Chair called for further discussion or questions from the Commissioners. ACTION TO RECOMMEND TABLING OF APPLICATION NO. 2011-004 LOREN VAN DER SLIK FOR GATLIN DEVELOPMENT COMPANY INC UNTIL MARCH 31 2011 There was a motion by Commissioner Parks, seconded by Commissioner Leino, to table Application No. 2011 -004, submitted by Loren Van Der Slik for Gatlin Development Company, Inc., for Preliminary Plat Approval of Shingle Creek Crossing until March 31, 2011 to allow further review and revisions to the Preliminary Plat to address concerns raised by Staff. Voting in favor: Chair Rahn, Commissioners Kuykendall, Leino, Morey, Parks, and Schonning The motion passed unanimously. The Planning Commission will continue the public hearing at their March 31, 2011 meeting. RESOLUTION OF THE BROOKLYN CENTER PLANNING COMMISSION CONCERNING CERTAIN REDEVELOPMENT PROJECT AREAS AND TAX INCREMENT FINANCING PROPOSALS OF THE CITY OF BROOKLYN CENTER AND THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER. Mr. Eitel explained that the City Council is considering on March 28, 2011 the creation of TIF District No. 5 and that the purpose of the resolution is to confirm that the proposed creation of a Tax Increment District is consistent with the Comprehensive Plan. Mr. Eitel commented on the following: • Tax Increment District 5 is a Renewal and Renovation District for eight parcels within the Brookdale site which meet the statutory requirements for blight and substandard code conditions. • It excludes Kohl's, EDA owned property (formerly Ground Round), Sears, Midas and Applebee's. 3 -17 -11 Page 4 The new district provides the funding source for the internal streetscaping and Shingle • Creek Daylighting components of the Shingle Creek Crossing PUD and an economic inventive component to facilitate the proposed demolition and redevelopment of Brookdale Mall. ACTION TO RECOMMEND APPROVAL OF PLANNING COMMISSION RESOLUTION NO. 2011 -004 There was a motion by Commissioner Kuykendall, seconded by Commissioner Parks, to recommend to the City Council that it approve Planning Commission Resolution No. 2011 -004 a Resolution of the Brooklyn Center Planning Commission Concerning Certain Redevelopment Project Areas and Tax Increment Financing Proposals of the City of Brooklyn Center and the Economic Development Authority in and For the City of Brooklyn Center. Voting in favor: Chair Rahn, Commissioners Kuykendall, Lein, Morey, Parks, and Schonning. And the following voted against the same: None Whereupon said resolution as declared duly passed and adopted. The Council will consider Planning Commission Resolution No. 2011 -04 at its March 28, 2011 meeting. PRESENTATION BY THE GATLIN DEVELOPMENT COMPANY DESIGN TEAM AND • REVIEW OF THE SHINGLE CREEK ARCHITECTURAL GUIDELINES AND STANDARDS. Ms. Kathy Anderson, President of Architectural Consortium, explained that there architectural guidelines are performance standards used to critique designs as they come in. She added that using mixtures of masonry and EFIS will create a desirable design to the development. Commissioner Parks stated his concerns with the back side of the development facing Hwy 100. He asked how the back side would be decorated to look more attractive to people along Hwy 100. Ms. 'Anderson stated that it was designed in a way such that traffic will not be entering from Hwy 100 but rather from Bass lake Road. Therefore, they built up the ponding area and trees and landscaping along Hwy 100 to attract attention to the signs and green areas rather than the back sides of the buildings. Ms. Anderson further described that storefront - design will be of glass and stone and will have the perception of two story buildings in the design. Chair Rahn added that -he would like to see more than just a sign showing what stores are there along Hwy 100 and the back side of a building. He suggested the design be more attractive along Hwy 100. 3 -17 -11 Page 5 • Ms. Anderson stated that she doesn't feel that the back sides of the building should attract too much attention since people will be traveling at a high speed and will hardly notice detail on the buildings as they travel Hwy 100. Commissioner Schonning stated that he feels this is an acceptable design and layout. He also stated that some - additional landscaping and berming will camouflage the back side of the buildings along Hwy 100. Commissioner Kuykendall stated that she is supportive of the layout also. Commissioner Leino stated that he shares concerns with others regarding how the back side of the building will look along Hwy 100. There was further discussion among the Commission and Ms. Anderson regarding signage, landscaping and the look and feel of the proposed buildings. Ms. Jackie Cook, with SAIC, stated she represents the Architects and Engineers for Walmart. She stated that Walmart is one of the pioneers in energy conversation by installing skylights on their buildings and uses energy and light from those on certain days which allows them to turn down lights in the building. They also design their stores with white roofs which saves energy and install all LED lighting on the site as well as installing occupancy sensors in areas of the store. There was further discussion by the Commission regarding the design and layout of the buildings. A report and recommendations on the design standards will be presented on the March 31, 2011 Planning Commission meeting. PRESENTATION BY THE GATLIN DEVELOPMENT COMPANY DESIGN TEAM AND REVIEW OF THE PHASE I INTERNAL STREETSCAPING AND LIGHTING FOR THE SHINGLE CREEK CROSSING PUD Will Matzek, representing Kimley -Horn, described and demonstrated a plan that included Phase I of the development and pointed out the areas that will be first developed and those that will be developed at a later date. Mr. Todd Halunen, Landscape Architect for the project, described the overall concept with the project and details that support the landscape plan. He stated that the mainTfocus in development of the site is to give a feel of a town image and town center. He added that the way to do that is with trees and certain lighting that often repeat in pattern. He pointed out an area of detail along Bass Lake Road that encourages pedestrian traffic along and throughout the site. Mr. Halunen explained that one of the highlights on the site is the daylighting of Shingle Creek which includes the look and feel of a bridge walkway on the site. Chair Rahn asked what part of the landscaping will take place on the site first. Mr. Halunen replied that landscaping and irrigation will take place on the site as development takes place and 3-17-11 Page 6 when the landscaping has the best chance for viability. A report on the minimum improvements • will be provided at the March 31, 2011 Planning Commission meeting. EDUCATIONAL OPPORTUNITIES OFFERED THROUGH THE GOVERNMENT TRAINING SEMINAR. -YOUR ROLE AS PLANNING COMMISSION MEMBER Mr. Eitel described upcoming planning training seminar opportunities that he would encourage Commission members to attend if available at the March 31, 2011 Planning Commission meeting. CONTINUED REVIEW OF COUNCIL GOALS AND THE 2010 PLANNING COMMISSION AGENDAS IN • PREPARATION FOR THE APRIL 6 TH JOINT COUNCIL/COMMISSION MEETING. Mr. Eitel explained that he will have materials prepared for the _ April 6 d " Council /Commission meeting. Commissioner Morey stated that she would like to receive her packet electronically to save paper and help the City go green. There was further discussion regarding the method of which agenda packets would be provided to the Commission. There was no other business. ADJOURNMENT There was a motion by Commissioner Leino, seconded by Commissioner Parks to adjourn the Planning Commission meeting. The motion passed unanimously. The meeting adjourned at 9:20 p.m. Chair Recorded and transcribed by: Rebecca Crass 3 -17 -11 Page 7 AGENDA CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY WORK SESSION March 28, 2011 Immediately Following Regular City Council and EDA Meetings Which Start at 7:00 P.M. Council Chambers City Hall A copy of the full City Council packet is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. ACTIVE DISCUSSION ITEMS 1. West Palmer Lake Park Building 2. Review of TIF 5 Development Agreement PENDING LIST FOR FUTURE WORK SESSIONS Later /Ongoing 1. Progress Reports on Achievement of Strategic Goals 2. School District Discussions/BC Strategic Plan Report 3. All City Open House 4. Sister City Update 5. Neighborhood Designations • 6. Department Year End Reports 7. Active Living Program 8. Graduated Sanitary Utility Rate Study 9. Garbage Hauler Organized Collection Update 10. Joint Meeting with Commissions April 6th Follow -up 11. Shingle Creek Crossing 12. Financial Commission Report 13. Youth Participation Request 14. Budget Reductions to Lower City's Reliance on State LGA 15. Highway 252 Update - June 2011 Work Session Agenda Item No. 1 i MEMORANDUM COUNCIL WORK SESSION DATE: March 23, 2011 TO: Curt Boganey, City Manager FROM: Steve Lillehaug, Director of Public Works /City Engineer S� ' SUBJECT: West Palmer Lake Park Building Replacement Recommendation: It is recommended that the City Council consider providing direction to staff regarding replacement of the West Palmer Lake Park building. Background: The 2011 Capital Improvement Program includes a project to replace the West Palmer Lake Park building. The new structure is planned to include picnic facilities, one unisex restroom and a small utility area. The new park building would be consistent with the park building constructed in Kylawn Park. in 2007 -2008 (see attached), which plans were developed and used as the template for the replacement of three City park buildings ( Kylawn Park, West Palmer Lake Park and Northport Park). Other planned improvements include new lighting, new trails around the building, new picnic tables and new litter- receptacles. During the construction of the Kylawn Park building, although the rough -in was completed for • the heating system, the furnace was eliminated due to budget constraints and has never been installed. It is planned to include and install a furnace with the West Palmer Lake -Park building. Policy Issues: Does the City Council desire to pursue replacing the West Palmer Lake Park building with similar plans to the Kylawn Park building? Council Goals: _ Strategic: 5. We will continue to maintain and upgrade City infrastructure improvements • Mission: Ensuring an attractive, cleaii, .safe coinnnnit; that enhances the quali v of life andpreserves the public trust 4* v. car ii UTILI Nis f F, i a ' ' r 2 END ELEVATION ATIOlY dtd• w f' fY �I �I J ACTIVITY R M C UTa 01 PICNI 24' Y 241 i ---------- A2 FLOOR PLAN 5HOWN THIS 5ET 2 5ID!E ELEVATION �a BASE B PLA AND ELEVATION i Y Y in, i y - '�' i it `'�'�' s'• - _Y it Figure 1. Existing West Palmer Lake Park Building (note picture was taken on 3/21/11, not 01/01/2005) • 1 1 11 igure 2. Existing West Palmer Lake Park Building (note picture was taken on 3/21/11, not 01/01/2005) i Figure 3. Kylawn Park Building k 0 Figure Building Work Session Agenda Item No. 2 • 1 MEMORANDUM - COUNCIL WORK SESSION • DATE: March 23, 2011 TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Business and Development 0& SUBJECT: Discussion on the Drafting of the Tax Increment Development Agreement for the Shingle Creek Crossing PUD (Tax Increment District No. 5) Recommendation: The purpose of this work session item is to confirm that the components of the Draft Development Agreement are consistent with the Council's direction and development framework as provided at the January 24, 2011 Council Work Session Jennifer Boulton, from the City Attorney Office will be present to review the attached summary of Development Agreement with the City Council and respond to Council questions. No formal action is required. Background: • On January 24, 2011, the City Council received an update from Gatlin Development Company regarding the proposed redevelopment of portions of the Brookdale Mall to be known as Shingle Creek Crossing and information from the City's financial consultant and staff relating to financial assistance to facilitate this commercial redevelopment. The consensus of the City Council was to move forward with the framework as presented. Attached is a copy of the February 1, 2011 letter to the developer, which outlines the Council direction/consensus to proceed with the framework of the proposed economic development assistance package and the January 20 Council minutes on this item. Recent changes to the Shingle Creek Crossing PUD and structuring of the development agreement which reflect modifications to the information available at the January 24, 2011 Council Work Session include the following: - The developer has entered into a purchase agreement to acquire the Midas Site and is revising the PUD plans to incorporate this site into the PUD. The developer has agreed to the use of a Pay -As- You -Go Note in lieu of the City issuing a G.O. Tax Increment Bond associated with the completion of the minimum improvements of the 1" phase, which includes the internal streetscaping and daylighting of Shingle Creek. • Mission. Ensuring an attractive, clean, safe community that enhances the quality of life anal preserves the public trust MEMORANDUM - COUNCIL WORK SESSION Policy Issues: . Does the City Council find the outline summarizing the Draft Development Agreement to be consistent with the Council's direction on the economic assistance /development framework for the Shingle Creek Crossing? g Does the City Council wish to have additional information prepared for their consideration of the Tax Increment Financing Development Agreement for the Shingle Creek Crossing PUD? Council Goals: Strategic: 2. We will aggressively proceed with implementation of City's redevelopment plans I • Mission: Ensuring an attractive, clean, safe community that enhances the quality of life anal preserves the public trust Summary of Development Agreement among the City of Brooklyn Center, Minnesota, Economic Development Authority of Brooklyn Center, Minnesota and Gatlin Development Company, Inc. To be considered April 11, 2011 ARTICLE III CONVEYANCE OF EDA PARCEL The Development Agreement provides that the EDA will sell the EDA Parcel to Gatlin for its appraised value pursuant to a separate Purchase Agreement. Rather than paying cash to purchase the EDA Parcel, Gatlin will deliver a promissory note, secured by a mortgage on the EDA Parcel. The promissory note will be forgiven and deemed paid if the Midas site is redeveloped consistent with the PUD. In accordance State law, the EDA Parcel must be re- conveyed to the EDA if Gatlin does not begin construction on the EDA Parcel consistent with a site plan approved by the City within one year of acquiring the EDA Parcel. ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Gatlin is required to obtain approval of a Planned Unit Development and enter into a PUD Agreement for the property in the TIF District. The Development Agreement requires that Gatlin (i) renovate and expand the existing Brookdale Mall, excluding the Sears department store, demolishing the three anchors and most of the mall space, and "reskinning" the exterior of the remaining portions of the existing mall; (ii) day -light Shingle Creek; (iii) construct the interior roadways within the TIF District, construct • roadways connecting 56th Avenue and Bass Lake Road, install sidewalks and pedestrian/street lighting, and landscaping of within the TIF District to achieve a "Town Center" look, (but parking and landscaping on the outlots is not required as part of the initial development); and (iv) construct of the storm water detention and/or retention areas within the TIF District, all consistent with the PUD (the "Minimum Improvements "). ARTICLE V TAX INCREMENT ASSISTANCE Upfront TIF District No. 2 Assistance When Gatlin has acquired the land in the TIF District, commenced demolition and asbestos removal before July 1, 2011, obtained construction financing and submitted construction plans for review and Wal -Mart has obtained a building permit and begun construction of foundations for the Walmart Supercenter, the EDA will provide Gatlin $1,400,000 from TIF District No. 2 to reimburse Gatlin for a portion of the cost of the land. (On April 11, 2011 the City Council will hold a public hearing on and consider approving a Spending Plan which authorizes use of available tax increments from TIF District No. 2 for the Shingle Creek Crossing project and the D -Barn link at the Earle Brown Heritage Center as well other projects which meet the requirements of the law that the Council and the EDA Board may consider at a later date Issuance of TIF Note When Gatlin has met all of the requirements for the Upfront TIF District No. 2 • Assistance (above) and has completed the Minimum Improvements, and the Walmart Supercenter is substantially complete, the EDA will provide Gatlin a pay -as- you -go tax 384107v2 JSB BR291 -304 increment revenue note to reimburse Gatlin for land and demolition, renovation, and other site development costs. The TIF note will be paid from 90% of the tax increments received in the first three years and 60% of the tax increments from TIF District No. 5 received in the remaining 12 years. The principal amount of the TIF note will be up to $2,300,000 and interest will be paid at 6 %. Forgivable Loan . When Gatlin has met all of the requirements for the Upfront TIF District No. 2 Assistance (above), the EDA will loan Gatlin $1,000,000 from TIF District No. 2 to reimburse Gatlin for a portion of the cost of the land. The loan will be secured by a mortgage on the Kohl's property. In a second phase of development Gatlin has proposed to develop three junior anchors (approximately 120,735 square feet), four restaurants (approximately 36,065 square feet), six retail stores (approximately 93,645 square feet) on the property in the TIF District and the EDA Parcel. If Gatlin constructs square feet of commercial space in addition to the Minimum Improvements within 5 years, the loan will be deemed paid and forgiven. If Gatlin develops constructs less than square feet of commercial space in addition to the Minimum Improvements within 5 years, only a portion of the loan will be deemed paid and forgiven. None of the loan will be forgiven unless Gatlin also renovates and obtains certificates of occupancy for 123,242 square feet of leaseable mall space. Any amounts which are not forgiven must be paid within 5 years with interest at 6 %. Use of Tax Increments The EDA may use tax increments from TIF District No. 5 which, are not pledged • to the TIF note for other purposes consistent with the TIF plan, including repaying $2,400,000 from TIF District No. 2. Business Subsidy Act Gatlin has provided information to show that this is a redevelopment project which is exempt from the business subsidy law. ARTICLE VI ENCUMBRANCE OF THE DEVELOPMENT PROPERTY The EDA and the City agree to subordinate the Development Agreement, the EDA Parcel Mortgage and the Kohl's Mortgage to the mortgage of a construction lender. In addition, the Development Agreement will be subordinate to Wal- Mart's lien relating to Gatlin's obligations to install site improvements in the TIF District. ARTICLE VIII TRANSFER LIMITATIONS AND INDEMNIFICATION Gatlin's ability to transfer its development obligations is limited. ARTICLE IX EVENTS OF DEFAULT AND DAMAGES If Gatlin fails to comply with the terms of the Development Agreement or is bankrupt, the City and the EDA can, among other remedies, suspend performance of their obligations under the Development Agreement or terminate the Development Agreement and TIF Note. • 384107v2 JSB BR291 -304 City of Brooklyn Center A Millennium Community February 1, 2011 Gatlin Development Company Attn: Frank Gatlin 101 S. Main Street Dickson, TN 37055 Re: Gatlin Development Company, Inc. Shingle Creek Crossing ("SCC") Redevelopment Public Assistance Request The purpose of this letter is to confirm the understanding reached during our meeting on January 20, 2011. Subject to a public hearing and as otherwise permitted by law, EDA Staff will negotiate with Gatlin for a development agreement with the EDA, the terms of which will be generally consistent with the following: 1. - $3.3 Million of "Up Front" Tax Increment F inancing. Subject to the City's ability to sell taxable tax increment revenue bonds in a principal amount equal to approximately' $2,500,000, the EDA will provide "upfront" TIF to reimburse Gatlin Development Company, Inc. or a new entity to be created by Gatlin for purposes of this Development (the "Developer ") for $3.3 million of costs Gatlin actually incurs to pay for TIF eligible expenses to be mutually agreed upon by the EDA and the Developer as necessary to reasonably ensure that the sum of the eligible expenses will total $3.3 million. The EDA will agree .to disburse the funds to Developer upon the Developer's providing the EDA with satisfactory evidence that the reimbursable work has been completed and the Developer has completed (i) the day - lighting of Shingle Creek; (ii) street construction /landscaping within the project to achieve a "Town Center" look, consistent with the proposed. SCC site plan; (iii) design and construction of the storm water detention and/or retention areas, consistent with the proposed SCC site plan; and (iv) "reskinning" the exterior of the remaining portions of -the existing mall. The EDA will provide this TIF financing without requiring an assessment agreement or increment guaranty from Walmart Parcel. Developer will provide a letter of credit from a bank acceptable to the EDA, in the amount of $2,500,000 (or such amount as is necessary to pay principal and maximum annual interest on the bonds), to assure payment of bonds issued by the EDA for the project. 2. No Public Subsidy to Benefit Walmart Notwithstanding anything to the contrary stated herein, the EDA shall not support any portion whatsoever of the public subsidy contemplated herein being contributed to Walmart with respect to any costs Walmart may incur in connection with its participation in the SCC Redevelopment. Therefore, the Development Agreement will strictly prohibit the Developer from using any portion of the TIF proceeds for costs associated with the development of the Walmart parcel or to otherwise subsidize the Walmart development. 3. Forgivable City Loan The EDA will lend the Developer $4000,000. The EDA i will disburse the loan proceeds to the Developer contemporaneously with the Developer's 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 ww w. cityo f brooklyncenter. org closing on the acquisition of the Capmark Parcel. The Development Agreement will strictly prohibit the Developer from using any portion of the loan proceeds for costs associated with the development of the Walmart parcel or to otherwise subsidize the Walmart development.. loan will bear interest at the rate of 6 % per annum and will mature five years from the date the EDA disburses the loan proceeds to ahe Developer ( "Maturity Date "). There will be no principal or interest payments due prior to the Maturity Date. All principal and accrued interest will be due and payable in full on the Maturity Date; provided, however, on the Maturity Date, the EDA will forgive amounts due under the terms of the promissory note as follows: (a) The Developer and the EDA will define, in the Development Agreement, the minimum square foot area of the improvements the Developer will construct within the Project — which the EDA and the Developer agree shall not include any structures existing as of the date of the Capmark Parcel closing that ultimately remain as part of the SCC Redevelopment. (b) If the Developer has completed and secured a certificate of occupancy for all of the agreed upon improvements on or before the Maturity Date; the EDA will forgive all principal and interest due. (c) If the Developer has not completed and secured a certificate of occupancy for all of the agreed upon construction on or before the Maturity Date, the Developer must pay to the EDA, on the Maturity Date, that portion of the principal (plus accrued interest thereon) that is proportional to the square foot area of the agreed upon improvement for which the Developer has not • completed and secured a certificate of occupancy before the Maturity Date. For example, if the Developer and the EDA agree that the Developer is to construct 350,000 square feet of improvements on or before the Maturity Date, and the Developer has completed and secured a certificate of occupancy for 315,000 square feet of improvements as of the Maturity Date and has not completed and secured a certificate of occupancy of 35,000 square feet (10 0 /o), the EDA would only forgive 90% of the principal and interest due on the EDA loan. The Developer will grant the EDA a mortgage on the development property, exclusive of the Walmart site, to secure its obligation to repay the loan. The EDA will agree in the Development Agreement and the mortgage that the EDA's mortgage is subordinate to any mortgages or liens on the Development property that the Developer has previously granted or thereafter grants to secure the repayment of loans, the proceeds of which the Developer - uses to finance hard or soft costs associated with the development of the Project or to secure the performance of the Developer's obligations to Walmart with respect to the performance of the Developer's obligations relating to the development of the Walmart site. J 4. Conveyance of the EDA Parcel The Development Agreement will provide that the EDA will sell the EDA Parcel to the Developer for an agreed purchase price to be determined based on the appraisal of the EDA Parcel. Prior to execution of the Development Agreement, Gatlin will secure an appraisal of the EDA Parcel at Gatlin's expense from an appraiser jointly selected by the EDA and Gatlin. The appraiser's analysis shall be based on an "as is" sale and a • closing within 90 days of the date of the appraisal. The'EDA will provide seller financing. The closing will occur after the Developer's acquisition of the Capmark property and the City and the EDA have approved a specific commercial use and site development plan for the EDA site. The Developer will execute a note in favor of the EDA for the amount of the purchase price. The Developer will grant the EDA a mortgage on the EDA Parcel to secure its obligation to repay the note. The note will bear interest at the rate of 6% per annum and will mature on the date five years from the closing date. The EDA will forgive the principal and interest due under the note, cancel the note and. release the mortgage if, on or before the maturity date, if the property currently occupied by Midas Muffler is developed in accordance with a development plan approved by the City and the EDA as a part of the planned unit development for the project, and . a certificate of occupancy has been issued for the development. After you have had the opportunity to review this letter, please call me to discuss any questions, comments or concerns you may have. Cornelius og City Manager cc: Jennifer Wolfe, Springsted Incorporated Chad Williard, Gatlin Development Company (cwilliardegatlindc.com) Gary Eitel, Business and Development • City Council MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER . IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA WORK SESSION JANUARY 24, 2011 CITY HALL — COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council/Economic Development Authority (EDA) met in Work Session called to order by Mayor/President Tim Willson at 8:25 p.m. ROLL CALL Mayor/President Tim Willson and Councilmembers /Commissioners Carol Kleven, Kay Lasman, Tim Roche, and Dan Ryan. Also present were City Manager Curt Boganey, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building & Community Standards Vickie Schleuning, Police Chief Kevin Benner, City Attorney Charlie LeFevere, and Carla Wirth, Timesaver Off Site Secretarial, Inc. STERLING SQUARE RENTAL LICENSE REVOCATION UPDATE City Manager Curt Boganey introduced the item, discussed the history, and requested Council • direction. Mayor/President Willson stated the property owner of Sterling Square had been adamant about revocation reconsideration; however, there is nothing in staff's report that would incline him to reconsider revocation at this point. Councilmember /Commissioner Ryan stated he had found a full one -year revocation to be excessive in this case and would support reconsideration of the revocation. He suggested revocation guidelines be established based on the term taxes and utilities remain in delinquency to assure consistency and avoid arbitrary action. The majority consensus of the- City Council was to not reconsider revocation of the Sterling Square Apartments rental license JOINT MEETING WITH COMMISSIONS Following discussion, the consensus of the City Council was to direct staff to schedule a joint meeting with Commissions on April 6, 2011, 6 -8 p.m., and to follow the same agenda format. SHINGLE CREEK CROSSING 01/24/11 -1- • Mr. Boganey introduced the item, discussed the history, and explained the three considerations before the Council related to Shingle Creek Crossing to receive a project update by Mr. Gatlin, an overview on the potential for financial assistance by Ms. Wolfe, and update by staff regarding its negotiation with the developer. Staff would then request Council provide comment and direction. Frank Gatlin, Gatlin Development, thanked the Council for the opportunity to present their plans and for the great work of City staff. He described his work on this project for the past two years to acquire the property and reach agreement with Walmart to provide the "bones and structure" for a great redevelopment. Mr. Gatlin reviewed his development experience, past projects, and described his vision for Shingle Creek Crossing to be a great success, stating it will be his "crown jewel." Mr. Gatlin displayed exterior site elevations, noting the site has great location with visibility from all directions. He reviewed his investigation to uncover every possible problem that could come forward with this project and intent to make Shingle Creek a focal point and desirable pedestrian- friendly area with restaurants alongside. Mr. Gatlin then addressed financing, noting this is the first time in 15 years he has requested assistance, which he does not like to do, and has worked with staff to develop the minimum request that will work. It was clarified that Walmart is not requesting any assistance. He advised that Gatlin Development is one of the most successful developers in the country and never failed in a development. However, he will have difficulty attracting desired tenants until the project moves forward and Brookdale Mall is demolished. Mr. Gatlin stated construction • will start as soon as possible, once approved, noting this will be the first project out of ground in the last three years. He assured the Council this will be a beautiful development, one the City can be proud of, and a catalyst for rebranding the City and spurring on development of neighboring parcels. Jenny Wolfe, Senior Project Manager with Springsted Incorporated, the City's financial consultant, presented the Shingle Creek. Crossing financing gap analysis that was conducted in reaction to a request for $10 million in TIF assistance. It was noted the project's cost was over $100 million and the developer would cover $51 million. Ms. Wolfe presented the projected rate of return and conclusion the proposed project would need some level of public assistance to proceed given the speculative nature of the retail and marginal return without assistance. The proposed TIF district supports $7 million of assistance, resulting in a return of 11.95 %, which exceeds 11.5% as a reasonable minimum return. Mr. Boganey noted the projections are based on assumptions that everything will fall into place within three years; however, that rarely occurs. The assistance is intended to share some of the risk that everything may not be built out as planned in three years or to the level assumed and anticipated. It will be used to share some upfront costs for items (daylighting of Shingle Creek, landscape, streetscape, creating a Town Square concept, etc.) the City wants to assure are completed at the beginning of the project, not later when the project starts to make revenue. Director of Business and Development Gary Eitel presented the three components making up.the framework for a financial assistance package as follows: 1. EDA provides $3.3 million for public 'purpose costs to ensure the timely redevelopment of the site and completion of the 01/24/11 -2- features prioritized by the EDA; 2. A collateralized $1 million forgivable loan having a term of five years with an interest rate of 6% (City's CIP assessment rate). The loan amount will be i available upon the execution of the Tax Increment Development Agreement which will limit the use of these funds to eligible public purpose costs and acquisitions, exclusive of Walmart related costs; and, 3. The EDA's lot will be included in the development of Shingle Creek Crossing PUD using the formula detailed in staff's report. Mr. Eitel listed the benefits the City would receive for an investment of $4.5 million that would create new development energy as far as the 57` and Logan EDA site. He explained the details of this framework will be negotiated in a development agreement through the City Attorney and conclude with the creation of a new TIF district and implementation. Mayor/President Willson stated that he is not shy about using TIF but believed the City needed to be prudent to assure increment is available to pay back TIF. He welcomed the opportunity to work with Mr. Gatlin to bring this project into Brooklyn Center. Mayor/President Willson stated he supports proceeding with the framework as outlined by Mr. Eitel and getting into the detail of the development agreement. Mr. Boganey stated if the Council reaches consensus regarding the general framework, staff will develop a specific development agreement that the Council/EDA will consider at a future meeting. Councilmember /Commissioner Roche noted that Brookdale Mall is the second oldest enclosed mall in the country. He stated that Walmart is going under a radical rebranding effort, as is . Brooklyn Center and Shingle Creek Crossing will help in that effort. He indicated he supported the terms of the framework and raised several design elements he would like considered including the daylighting of Shingle Creek and iconic building lighting to attract customers. He also suggested that the 12 stall parking area by Sears be reconfigured. Mr. Gatlin assured the Council they will work diligently with City staff to create the best design possible during the permitting, planning, and approval process that gives the Council the assurances they are looking. He asked the Council to keep in mind that Walmart is only 20% of this development so there will be many new shops. Mr. Gatlin stated he owns the Macy's building and described the potential ownership arrangements with the other buildings that would allow flexibility to attract desirable tenants. He presented an option that will be considered to use the building adjacent to Sears to create an interior climate - controlled corridor, a mall component. Councilmember /Commissioner Lasman asked staff to consider measurable performance benchmarks for TIF. Mr. Boganey stated those details will be spelled out in the assistance agreement. He noted the Council has a lot of influence through the PUD process to address details to be included. Councilmember /Commissioner Lasman stated it sounds like Mr. Gatlin is anxious to get started and she would like to see a standards and timeline that identifies dates when things will happen. • 01/24/11 -3- Mr. Gatlin gave credit to City staff for developing this TIF concept and $1 million incentivized forgivable loan. He indicated he supports this plan, which is less than one -half the $10 million he had requested for this $100 million project. Mr. Gatlin estimated that Shingle Creek Crossing will result in producing millions more dollars for the City and this plan gives him incentive to complete the project quickly to meet the thresholds in Phase 1 to receive assistance. Councilmember /Commissioner Ryan stated he appreciates hearing that Walmart will "carry its own freight" because otherwise the community would question giving assistance to the richest company in the world. He stated he appreciates how challenging the market is today and supports the framework that will provide needed capital up front. Councilmember /Commissioner Ryan stated he looks forward to the process moving forward and appreciates the comments from a third party to evaluate the financials. Mr. Gatlin commented on the effort of Walmart to change its image and advised of its generosity in making donations to the community. He stated he is appreciative of the Council's support and will perform if the project is approved. Mr. Gatlin commented on the perfect timing for this project since they intend to open the first store in 2012, the 50 year anniversary of the Brookdale Mall opening. He stated they plan to schedule a ground breaking in May complete with a wrecking ball and big ceremony. He commented on the generosity of Walmart to become involved in the community and stated they will be looking for places to make donations. • Councilmember /Commissioner Lasman suggested they consider the Centennial Park bandshell that the Centennial Committee is working to erect. Councilmember /Commissioner Kleven indicated she is excited about this project and appreciates the work of staff and Mr. Gatlin. The consensus of the City Council was to move forward with the framework as presented. ADJOURNMENT Councilmember /Commissioner Lasman moved and Councilmember /Commissioner Ryan seconded adjournment of the City Council/Economic Development Authority Work Session at 9:45 p.m. Motion passed unanimously. 01/24/11 -4- STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes , CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Work Session of the .City Council of the City of Brooklyn Center held on January 24, 2011. 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3: That the City Council adopted said minutes at its February 14, 2011, Regular Session. City Clerk Mayor • 01/24/11 -5-