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HomeMy WebLinkAbout2019-14 EDARECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER, MINNESOTA CITY OF BROOKLYN CENTER COUNTY OF HENNEPIN STATE OF MINNESOTA Commissioner Ryan introduced the following resolution and moved its adoption: RESOLUTION NO. 2019-014 RESOLUTION APPROVING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO. 1, ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 8 THEREIN AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR WHEREAS, it has been proposed that the Economic Development Authority of the City of Brooklyn Center, Minnesota (the "EDA") modify the Redevelopment Plan for its Housing and Redevelopment Project No. 1 (the "Redevelopment Project"); establish Tax Increment Financing District No. 8: Real Estate Equities (a housing district) ("TIF District No. 8") within the Redevelopment Project; and adopt the Tax Increment Financing Plan (the "TIF Plan") therefor; all pursuant to and in conformity with applicable law, Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"), Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.090 to 469.108 1, all inclusive, as amended, (collectively, and together with the TIF Act, the "Act"), and all as reflected in that certain document entitled in part "Modification of the Redevelopment Plan for Housing Development and Redevelopment Project No. 1 and Tax Increment Financing Plan for Tax Increment Financing District No. 8: Real Estate Equities (a Housing District)" dated June 7, 2019 (collectively, the "Plans"), presented for the Board's consideration; WHEREAS, the Board has investigated the facts relating to the Plans and certain information and material (collectively, the "Materials") relating to the TIF Plan and to the activities contemplated in TIF District No. 8 have heretofore been prepared and submitted to the Board and/or made a part of the EDA files and proceedings on the TIF Plan. The Materials include the tax increment application made and other information supplied by Real Estate Equities, Inc., a Minnesota corporation (or one or more limited partnerships or other entities to be formed thereby or affiliated therewith, the "Developer") as to the activities contemplated therein, the items listed under the heading "Supporting Documentation" in the TIF Plan, and information constituting or relating to (1) why the assistance satisfies the so-called "but for" test and (2) the bases for the other findings and determinations made in this resolution. The Board hereby confirms, ratifies and adopts the Materials, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein; WHEREAS, 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 to notice to the County Commissioner representing the area of the County to be included in TIF District No. 8, and delivery of the Plans to Hennepin County and Independent School District No. 281 587107v3BR291-400 (Robbinsdale); and the City Council has held a public hearing thereon on the date hereof following notice thereof published in accordance with state law; WHEREAS, TIF District No. -8 is being established to facilitate the acquisition, construction and equipping of an approximately 270 -unit rental housing development, including workforce housing and senior housing, and related amenities (the "Development") to be constructed by the Developer. NOW, THEREFORE, 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. Findings for the Adoption and Approval of the Plans. 1.01. 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. 8 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. 1.02. The Board hereby finds that TIF District No. 8 is in the public interest and is a "housing district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, because it consists of a project or portion of a project intended for occupancy, in part, by persons or families of low and moderate income as defined in Chapter 462A, Title II of the National Housing Act of 1934; the National Housing Act of 1959; the United States Housing Act of 1937, as amended; Title V of the Housing Act of 1949, as amended; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. The Development to be constructed in TIF District No. 8 will consist of approximately 270 units of workforce or senior rental housing. Developer has represented that at least 40% of the units (i.e., 108 units) will be rented to and occupied by individuals or families whose income is not greater than 60% or less of area median income and that no more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 1.03. The Board hereby makes the following additional findings in connection with TIF District No. 8: (a) The Board 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 construction of the Development would not be undertaken in the reasonably foreseeable future. The property has remained 2 587107v3BR291-400 undeveloped for several years despite previous efforts to redevelop the property. The rents for affordable housing projects do not provide a sufficient return on investment to stimulate new development. The Developer has represented that it could not proceed with the Development without the tax increment assistance to be provided to the Developer. The Developer has provided the EDA its estimated Development proforma outlining project sources and uses as well as projected rent, vacancy and financing assumptions. City staff and the City's advisors reviewed the information and have determined the Development is not feasible without the proposed assistance due to anticipated rent levels and market returns not supporting the development costs. Based on the review, the EDA does not expect that a development of this type would occur in the reasonably foreseeable future but for the use of tax increment assistance. (b) The Board further finds that the TIF 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 TIF Plan will generally compliment and serve to implement policies adopted in the City's comprehensive plan. The development contemplated on the property is in accordance with the existing zoning for the property, as modified in accordance with an approved planned unit development agreement. (c) The Board further finds that the TIF Plan will afford maximum opportunity consistent with the sound needs of the EDA as a whole for the development of TIF District No. 8 by private enterprise. The specific basis for such finding being: The proposed development to occur within TIF District No. 8 is primarily low and moderate income senior or workforce housing. The development will increase the taxable market valuation of the City, and the number of available low and moderate income senior and workforce housing units in the City. 1.04. The provisions of this Section 1 are hereby incorporated by reference into and made a part of the TIF Plan and the findings set forth in Appendix C to the TIF Plan are hereby incorporated by reference into and made a part of this Resolution. 1.05. 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 TIF Plan for TIF District No. 8 and the Redevelopment Plan for the Redevelopment Project. 587107v3BR291-400 Section 2. Approval and Adoption of the Plans, Policy on Interfund Loans and Advances. 2.01. TIF District No. 8 is hereby established and 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. The Business and Development Director is hereby directed to request, in writing, the Hennepin County Auditor to certify the new TIF District No. 8 and to file the Plans with the Commissioner of Revenue and the Office of the State Auditor. 2.02. The Board hereby approves a policy on interfund loans or advances ("Loans") for TIF District No. 8, as follows: (a) The authorized tax increment eligible costs (including without limitation out-of-pocket administrative expenses in an amount up to $1,750,780, interest in an amount up to $6,978,073 and other development costs in an amount up to $10,529,725) payable from TIF District No. 8, as provided in the TIF Plan as originally adopted or as it 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 may exceed $19,258,578 outstanding at any time. (d) All Loans shall mature not later than February 1, 2047 or such earlier date as the City Finance Director may specify in writing. All Loans may be pre -paid, in whole or in part, whether from tax increment revenue, tax increment revenue bond proceeds or other eligible sources. (e) The outstanding and unpaid principal- amount of each Loan shall bear interest at the rate prescribed by the statute (Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified under Sections 270C.40 or 549.09 at the time a Loan, or any part of it, is first made, subject to the right of the EDA Finance Director to specify a 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. (g) In particular the EDA authorizes an interfund loan to be advanced from Redevelopment Tax Increment Financing District No. 3, in the amount of up to $50,000, 4 587107v3BR291400 to pay administrative expenses not paid by the Developer, to be repaid, not later than February 1, 2047, from tax increments of TIF District No. 8 to the extent not otherwise pledged to other obligations of TIF District No.8, with interest thereon at 4% per annum from the date advanced until repaid in full unless otherwise provided, in writing, by the City Finance Director. July 8. 2019 Date Chair ATTEST: r The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Lawrence -Anderson and upon vote being taken thereon, the following voted in favor thereof: Butler, Elliott, Graves, Lawrence -Anderson, and Ryan and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. 5 587107v3BR291-400 SECRETARY'S CERTIFICATE I, 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 July 8, 2019, 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. 8 therein. WITNESS My hand this day of July, 2019. Sec eta Economt Development Authority of the City of Brooklyn Center, Minnesota 6 587I07v3BR291-400