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HomeMy WebLinkAbout2011-007 EDAR Commissioner Tim Roche introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2011 -07 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 BE IT RESOLVED by the Board of Commissioners (the `Board ") of the Economic Development Authority of the City of Brooklyn Center, Minnesota (the "EDA "), as follows: Section 1. Recitals 1.01. It has been proposed that the XDA modify the Redevelopment Plan for its Housing and Redevelopment Project No`. l (the "Redevelopment Project "); and establish Tax Increment Financing District No. 5 within the Redevelopment Project and adopt the 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 469.1799, 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 Board's consideration. 1.02. The Board has investigated the facts relating to the Plans. 1.03. The EDA 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 the holding of a public hearing by the City thereon following notice thereof published in the City's official newspaper at least 10 but not more than 30 days prior to the'public hearing. 1.04. Certain written reports and other documentation (collectively, the "Reports ") relating to the Plans, including 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 Assessment Prepared by Alden Associates Architectural Services, have heretofore been assembled or prepared by staff or others and submitted to the Board and/or made a part of the EDA files and proceedings on the Plans. The Reports include data, information and /or substantiation constituting or relating to (1) the "studies and analyses" on why 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 Board hereby confirms, ratifies and adopts the Reports, which are hereby EDA RESOLUTION NO. 2011 -07 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 Board hereby 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 Board 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 Board 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% o) 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 Board of Commissioners hereby makes the following additional findings in connection with TIF District No. 5: (a) The Board of Commissioners further finds that the proposed development, in the opinion of the Board of Commissioners, 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 remediation and environmental contamination along with extensive street and landscaping costs required by the City cannot be supported EDA RESOLUTION NO. 2011 -07 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 Board of Commissioners further finds that the Tax Increment Financing Plan conforms to the general plan for the development or redevelopment of the EDA 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 Board of Commissioners further finds that the Tax Increment Financing Plan will afford maximum opportunity consistent with the sound needs of the EDA 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 EDA. 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 Board of Commissioners 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 Board of Commissioners 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 EDA, the School District, and the County, and the tax increment assistance does not exceed the benefit which will be derived therefrom. EDA RESOLUTION NO. 2011 -07 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 Board further finds that the Plans are intended and in the judgment of the Board 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 Board on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted, and shall be placed on file in the office of the City Finance Director. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. Subject to approval by the City Council following a public hearing, 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 Board hereby approves a policy on interf ind 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 any fund or account of the EDA 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. (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 any part of it, is first made, subject to the right of the EDA Finance Director to specify a EDA RESOLUTION NO. 2011 -07 lower rate (but not less than the EDA'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 c 7 Date President The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Dan Ryan and upon vote being taken thereon, the following voted in favor thereof. Tim Willson, Carol Kleven, Tim Roche, and Dan Ryan; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted. EDA RESOLUTION NO. 2011 -07 SECRETARY'S CERTIFICATE 1, the undersigned, being the duly qualified and acting Secretary of the Economic Development Authority 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 Board of Commissioners of said EDA 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 EDA's Housing and Redevelopment Project No. 1 and Tax Increment Financing District No. 5 therein. WITNESS My hand this day of March, 2011. Secretary Economic Development Authority of the City of Brooklyn Center, Minnesota