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HomeMy WebLinkAboutResolution No. 2021-60 Establishing 4040 W 70 TIF DistrictCITY OF EDINA COUNTY OF HENNEPIN STATE OF MINNESOTA Councilmember introduced the following resolution and moved its adoption: RESOLUTION 2021-60 ESTABLISHING THE 4040 WEST 70th STREET TAX INCREMENT FINANCING DISTRICT BE IT RESOLVED by the City Council (the "Council") of the City of Edina, Minnesota (the "City"), as follows: Section I. Recitals. 1.01. The Board of Commissioners of the Edina Housing and Redevelopment Authority (the "HRA") have heretofore established the Southeast Edina Redevelopment Project Area (the "Project Area") and adopted a Redevelopment Plan therefore. It has been proposed by the HRA and the City that the City approve and the HRA adopt a Modification to the Redevelopment Plan for the Project Area (the "Redevelopment Plan Modification") and a Tax Increment Financing Plan (the "TIF Plan") for the establishment of the 4040 West 70th Street Tax Increment Financing District (the "TIF District") therein (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1794, all inclusive, as amended, (the "Act") and Minnesota Session Laws 2014, Chapter 308, Article 6, Section 8, as amended by Minnesota Session Laws 2017, First Special Session Chapter I, Article 6, Sections I 1 and 16, and Minnesota Session Laws 2019, First Special Session Chapter 6, Article 7, Section 3 (the "Special TIF Housing Legislation") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The HRA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The HRA and City will have performed all actions required by law to be performed prior to the establishment of the TIF District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Hennepin County and Independent School District No. 273 having taxing jurisdiction over the property within the TIF District, a review of and written comment on the Plans by the City Planning Commission, approval of the Plans by the HRA on July 29, 2021, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the activities contemplated therein have heretofore been prepared by staff and consultants 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 the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. CITY OF EDINA 4801 West 50th Street • Edina, Minnesota 55424 Resolution 2021-60 Page 2 1.05. The City is not modifying the boundaries of the Project Area, but is, however, modifying the Redevelopment Plan to include activities related to the TIF District. Section 2. Findings for the Adoption and Approval of the Redevelopment Plan Modification. 2.01. The Council approves the Redevelopment Plan Modification, and specifically finds that: (a) the land within the Project Area would not be available for redevelopment without the financial aid to be sought under this Redevelopment Plan; (b) the Redevelopment Plan, as modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project Area by private enterprise; and (c) that the Redevelopment Plan, as modified, conforms to the general plan for the development of the City as a whole. Section 3. Findings for the Establishment of the TIF District. 3.01. The Council hereby finds that the TIF District is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. I I of the Act and the Special TIF Housing Legislation. 3.02 The Council further finds that the proposed development would not occur solely through private investment within the reasonably foreseeable future, that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole; and that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole, for the redevelopment or development of the TIF District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 3.04. The HRA elects to calculate fiscal disparities for the TIF District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the TIF District. Section 4. Public Purpose. 4.01. The adoption of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide housing opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. For the reasons described in Exhibit A, the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make the development financially feasible. As such, any private benefits received by a property owner are incidental and do not outweigh the primary public benefits. Section 5. Approval and Adoption of the Plans. 5.01. 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 HRA Executive Director. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Sharon Allison, City Clerk Dated: August 17, 2021 Attest: (Seal) James B. Hovland, Mayor Resolution 2021-60 Page 3 5.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the TIF District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the HRA is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the TIF District, for which building permits have been issued during the I8 months immediately preceding the adoption of this resolution. 5.04. The HRA Executive Director is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469. I 75, Subd. 4a. The motion for the adoption of the foregoing resolution was duly seconded by Council member 3—as_KS C D , and upon a vote being taken thereon the following voted in favor thereof: ArThrl VZ"=-,01-) <<c oiN CA N 1 Acs:. \t,C LU / and and the following voted against the same: Resolution 2021-60 Page 4 EXHIBIT A RESOLUTION NO. 2021-60 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the 4040 West 70th Street Tax Increment Financing District, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: I. Finding that the 4040 West 70th Street Tax Increment Financing District is a housing district as defined in M.S., Section 469.174, Subdivision I I and the Special TIF Housing Legislation. 4040 West 70th Street Tax Increment Financing District consists of one (I) parcel within the Southeast Edina Redevelopment Project Area. The development will consist of the redevelopment of the property to construct 1 I 8-units of senior affordable housing in the City, all or a portion of which will receive tax increment assistance and will meet income restrictions described in M.S. 469.1761. At least 20 percent of the units receiving assistance will have incomes at or below 60 percent of area median income. 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. This finding is supported by the fact that the development proposed in this plan is a housing district that meets the City's objectives for redevelopment and is intended for occupancy by low and moderate-income persons. Due to the high costs of land acquisition and building costs of new housing in the City, this project is feasible only through assistance, in part, from tax increment financing. The developer has provided the city its estimated project budget and financing projections. At least 85% of the proposed housing units are intended to be both rent and income restricted at levels designated for low and moderate incomes. The affordable rental revenues alone are insufficient to provide a sufficient rate of return, pay operating expenses, and service the debt necessary to make the project economically feasible. City staff and the City's advisors have reviewed the information and determined the project demonstrates the need for tax increment assistance. The necessity of public assistance is true for most affordable housing developments in Minnesota. The affordable project also requires public assistance beyond tax increment. The developer has applied for an allocation of tax-exempt bonding authority and federal low-income housing tax credits from the Minnesota Housing Finance Agency (MHFA). The City and HRA's assistance is necessary in order to leverage the potential federal subsidy necessary to finance the redevelopment. 3. Finding that the TIF Plan for the 4040 West 70th Street Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and approved Resolution B-21-22 on July 28, 2021 to affirm that the TIF Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for the 4040 West 70th Street Tax Increment Financing District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of the Southeast Edina Redevelopment Project Area by private enterprise. Resolution 2021-60 Page 5 Through the implementation of the TIF Plan, the City will provide an impetus for residential development, which is desirable and necessary for meeting the housing needs of an increasing population, people with a variety on incomes needing housing alternatives that would otherwise not be available, and an increased need for life-cycle housing within the City. STATE OF MINNESOTA COUNTY OF HENNEPIN SS CITY OF EDINA CERTIFICATE OF CITY CLERK I, the undersigned duly appointed and acting City Cleric for the City of Edina do hereby certify that the attached is a true and correct copy of the Resolution duly adopted by the Edina City Council at its regular meeting of August I 7, 2021, and as recorded in the Minutes of said regular meeting. WITNESS, my hand and seal of said City this Sharon Allison, City Cleric day of iek—V‘ rASJC , 2021.