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HomeMy WebLinkAbout2016-12-20 HRA Work SessionAgenda Housing and Redevelopment Authority Work Session Meeting City of Edina, Minnesota Edina City Hall Com m unity Room Tuesday, December 20, 2016 5:30 PM I.Call to Order II.Roll Call III.Discussion Item 5-2016 - Use of Va cant Parcel at 71st and Xerxes IV.Public Financing Options - Ta x Aba tement V.Adjournment The Edina Housing a nd Redevelopment Authority wants all pa rticipants to be comforta ble being pa rt of the public process. If you need assistance in the way of hearing ampli/cation, an interpreter, large-print documents or something else, please call 952-927-8861 72 hours in advance of the meeting. Date: Dec ember 20, 2016 Agenda Item #: III. To:Chair & Commissioners of the Edina HRA Item Type: R ep o rt / Rec o mmendation From:Bill Neuendorf, Econo mic Development Manager Item Activity: Subject:Dis c us s io n Item 5-2016 - Us e of Vac ant Parc el at 71st and Xerxes Dis cus s ion Edina Housing and Redevelopment Authority Established 1974 CITY O F EDINA HOUSING & REDEVELOPMENT AUT HORITY 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: No action required - for discussion purposes only. INTRODUCTION: T his topic regards the potential use of vacant property located on Xerxes Avenue between 71st and 72nd Streets. ATTACHMENTS: Description Dis cus s ion item 5-2016 Parcel Map - 71st and Xerxes For Discussion only Edina HRA Discussion Item 05-2016 City / HRA Objective Consider using vacant property at 71st & Xerxes to enhance green space opportunities when the Southdale Library Site is redeveloped Vision Edina Page Pgs 7, 8, 9, 10 Work Plan Item Focused Redevelopment #6 Description of Project The City of Edina owns a 0.51 acre vacant parcel immediately south Hennepin County’s property at 7001 York Avenue. The County intends to consider proposals to redevelop their 8-acre site in summer 2017. The intended outcome is a new regional library facility that is well integrated with additional revenue-generating development that creates a successful and desirable destination for the communities served. Initial public input demonstrates interest in enhancing green space to benefit all surrounding residents and patrons. The City-owned parcel is currently vacant but has a configuration and location that is nearly unbuildable. The parcel could possibly serve as a green space that connects the Hennepin County site to Adams Hill Park and Promenade Park. Alternatively, it could serve as a linear park configured with new landscaping and trees. Would the HRA allow this vacant parcel to be included in the preliminary site concepts and identified in the RFQ/RFP to be issue in Spring 2017? Location Xerxes Avenue, between 71st and 72nd Streets Estimated Costs Negligible – Staff time Funding Source(s) Not applicable Timeframe 2017 - 2019 Misc. Staff Comments A parcel map is attached. Housing and Redevelopment Authority Established 1974 Date Discussed December 20, 2016 Work Session Direction Provided to Staff Next Step(s) Prepared: 12-8-2016 He nn e pin Cou n ty P ro perty Ma p va ca nt C ity-ow ne d pr ope rty Da te : 12 /8/20 16 Comm en ts: 1 inc h = 2 00 fee t PAR CEL ID: 32 028 24 210 00 8 OWN ER N AME: Villag e Of Ed ina PAR CEL AD DRESS: 2 4 A ddr es s U na ss ign ed , Edin a MN 0 000 0 PAR CEL AR EA: 0.5 1 ac re s, 22,1 78 sq ft A-T-B: To rr ens SAL E PR ICE: SAL E D ATA: SAL E C OD E: ASSESSED 20 15 , PAYABLE 201 6 PROPERT Y TYPE: R es iden t ial H OM ESTEAD : N on -H ome stea d M AR KET VAL UE: $0 TAX TO TAL: $0 .0 0 ASSESSED 20 16 , PAYABLE 201 7 PRO PER TY TYPE: R eside ntial HO MESTEAD: No n-h ome ste ad MARKET VALU E: $0 This data (i) is fur nish ed 'A S IS' wit h no represent at ion as t o com ple ten ess or acc urac y ; (ii) is furnis hed w it h n o war rant y of an y k ind; an d (ii i) is not sui tab le for lega l, engi neering or surv ey ing purposes . Hen nepin County s hall not be l iable fo r a ny damage, in jury or los s re sul ting f rom this dat a. COP YRIG HT © H EN N EPIN COU N TY 20 1 6 Date: Dec ember 20, 2016 Agenda Item #: IV. To:Chair & Commissioners of the Edina HRA Item Type: R ep o rt / Rec o mmendation From:Bill Neuendorf, Econo mic Development Manager Item Activity: Subject:Public F inancing Op tions - Tax Ab atement Dis cus s ion Edina Housing and Redevelopment Authority Established 1974 CITY O F EDINA HOUSING & REDEVELOPMENT AUT HORITY 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: No action required - for discussion purposes only. INTRODUCTION: Minnesota statutes provide a few options for public financing. Edina has used Tax Incremental Financing (T IF) on a few occasions. A lesser known tool is Tax Abatement. An overview of this tool is provided in case there is interest in considering using abatement in the future. ATTACHMENTS: Description Tax Abatement - Ehlers overview Tax Abatement Minnesota Statutes 469.1812-469.1815 allow political subdivisions such as counties, cities, towns, and school districts to abate their share of all or a portion of property taxes within a defined geographic area. It allows each major taxing jurisdiction to choose to contribute its share of taxes toward a stated public purpose and limit the amount in any manner it deems appropriate. Neither a lengthy plan nor a full “but/for” finding is required by statutes. However, there are requirements that the resolution approving an abatement plan contain a cost/benefit analysis. A public hearing must be held on the abatement. Following the hearing, the governing body must find that an abatement agreement will be in the public interest because it will:  Increase or preserve tax base;  Provide employment opportunities;  Acquire or construct public facilities;  Redevelop an area;  Provide access to services for residents;  Finance or provide public infrastructure, or  Phase in certain property tax increases The tool can be used to finance public infrastructure, public facilities including parks and recreational facilities, as well as assist development projects. Recent examples of its use for public improvements are financing land acquisition for parks, recreation facilities, civic centers, expansion of major intersections to accommodate new retail development, and stoplights for new market-rate housing subdivisions. How does tax abatement work? In practice, tax abatement is a reallocation of taxes rather than an exemption from paying taxes. The abated parcel pays taxes in the same manner it would if the taxes were not being abated. The taxing authority identifies the amount as a special levy and the county distributes it to the political subdivision with other tax collections. The abatement amount is included within the Truth in Taxation and certified levy process. The amount collected is directed toward a specific project rather than going to general funds. Abatement Limits In any one year, the TOTAL amount a political subdivision may abate may not exceed the greater of 10% of its net tax capacity or $200,000. In addition, taxes on a parcel may not be abated while the parcel is located in a tax increment district. If all three major taxing entities (city, county and school district) participate in tax abatement the maximum term is 15 years. However, if only one or two participate, the maximum term is 20 years. Bonding Authority Municipalities may issue general obligation bonds to finance abatement projects. The maximum principal may not exceed the sum of the abatements for the years authorized. Tax abatement bonds are excluded from the calculation of the net debt limit. What is the process for establishing tax abatement? After identifying the parcels and appropriate amounts, a public hearing with at least 10 day published notice must be held by each entity granting the abatement. The entity granting the abatement is then required to adopt a resolution specifying and approving the abatement. The resolution must include the following: (1) Term of the abatement, (2) Statement of Public benefit expected to result from the abatement, (3) Required findings detailed above, and (4) Scheduled repayment of deferred taxes (if applicable). Because in certain instances abatement can be a "business subsidy" subject to Minnesota Statutes 116J.993-116J.995, it is recommended that it be utilized in conjunction with a development agreement that clearly spells out a developer's responsibilities with respect to improvements and job and wage goals. Calculation The maximum amount of an abatement is calculated by multiplying the approving entity’s local tax rate by the net tax capacity of the identified parcel. For development assistance, the amount may “capture” the existing base value as well as the anticipated increase in value. Other Considerations  Abatement may be utilized to retain businesses by abating existing taxes.  Abatement does not require a property owner’s consent  In financing public infrastructure, abatements may be authorized regardless if the benefited infrastructure is on or adjacent to the parcels for which the taxes are abated.  A commercial property’s Fiscal Disparities contribution may be included in the abatement.  Taxes that cannot be abated are those of other minor jurisdictions (watershed, HRA, etc.), referendum and market value based levies, or state property taxes. $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 Improvement Value Sample: $10 million Commercial  Redevelopment Base Taxes City County School FD Taxes Other Local MV Taxes State Taxes Potential Abatement Taxes pooled from City, County and School District