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HomeMy WebLinkAboutResolution No. 2022-26 Establishing 70th & France TIF DistrictCITY OF EDINA COUNTY OF HENNEPIN STATE OF MINNESOTA Councilmember introduced the following resolution and moved its adoption: RESOLUTION 2022-26 ESTABLISHING THE 70TH AND FRANCE 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 70th and France 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") 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 March 3, 2022, 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. 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. CITY OF EDINA 4801 West 50th Street • Edina, Minnesota 55424 Resolution 2022-26 Page 2 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 "renewal and renovation district" under Minnesota Statutes, Section 469.174, Subd. I Oa of the Act. 3.02. The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the 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. 3.03. The Council finds 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. 3.04. 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. 3.05. 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 and employment 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. Resolution 2022-26 Page 3 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. 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 18 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 469.175, Subd. 4a. :the motion for the adoption of the foregoing resolution was duly seconded by Council member , and upon a vo e being taken thereon, the following voted in favor thereof: - °VA and and the following voted against the same: Dated: March 22, 2022 Attest: Sharon Allison, City Clerk (Seal) James B. Hovland, Mayor Resolution 2022-26 Page 4 EXHIBIT A RESOLUTION NO. 2022-26 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the 70th and France Tax Increment Financing District, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: I . Finding that the 70th and France Tax Increment Financing District is a renewal and renovation district as defined in M.S., Section 469.174, Subdivision 10a. The District consists of two (2) parcels within the Southeast Edina Redevelopment Project Area and their internal and external rights-of-way, abutting roadways and intersections, with plans for demolition and clearance of substandard buildings for the private redevelopment of underutilized property at the 700,1 and 7025 France site. The redevelopment will consist of subdividing the site into small parcels and installation of site infrastructure necessary to enable new construction of a mixed-use commercial office building, a high-rise residential tower, a 6,500 square foot commercial bank branch and a district parking facility. Parcels consisting of 70 percent of the area of the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures. One of two buildings in the District, not including outbuildings, is structurally substandard and the other building requires substantial renovation or clearance to remove inadequate street layout and obsolescence not suitable for improvement or conversion. (See Appendix D of the TIF Plan.) 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 and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the 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 District permitted by the TIF Plan. 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: This finding is supported by the fact that the activities proposed in the TIF Plan meets the City's objectives for redevelopment. The existing property contains substandard buildings whose renovation requires high costs related to demolition, remediation, site improvement, and construction of infrastructure. The redevelopment also requires substantial investment toward public improvements such as shared public parking. The combination of limited amounts of property available for expansion adjacent to the existing redevelopment site and the public and private cost of financing the proposed improvements which are essential to the comprehensive redevelopment of the area, this project is feasible only through assistance, in part, from tax increment financing. The developer provided a proforma outlining project sources and uses as well as projected rent, vacancy and financing assumptions. City staff and the City's financial advisor reviewed the information and have determined that the project is not feasible without assistance due to anticipated rent levels and market returns not supporting the overall redevelopment costs for this site. The term of assistance for the redevelopment project is expected to be less than the maximum I 6-year term of a renewal and renovation district. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing 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 District permitted by the TIF Plan: This finding is justified on the grounds that the development intensity and tax base created on currently underutilized and declining property requires Resolution 2022-26 Page 5 site and public improvement costs that are improbable without public assistance. Specifically, the cost of site preparation, demolition, remediation, and public improvements to include infrastructure and district parking will add significantly to the total redevelopment cost of any development in this area. Site and public improvements costs necessary to sustain the approved density have made redevelopment infeasible without tax increment assistance. The City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total estimated increase in taxable market value will be $169,904,000. 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 $25,988,575. 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 taxable market value increase greater than $143,915,425 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the 70th and France Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Housing and Redevelopment Authority requested a written opinion from the City's Planning Commission regarding whether the proposed redevelopment identified in the TIF Plan conforms with the general plans for the development of the City as a whole. The Planning Commission raised concerns with the quantity and design of parking on the approved site plan within its Resolution B-22-06. The City Council recognizes but disagrees with the opinion rendered by the Planning Commission in Resolution B-22-06. In accordance with Minnesota Statute 469.028 subd. 2 and 469.002 subd. 22, the City Council renders its determination based on the land use provisions of the Comprehensive Plan. The City Council re-affirms the findings of Resolutions 2021-103 and Ordinance 2021-12 approving the Preliminary Zoning and Preliminary Development Plan for the redevelopment property. That same plan is contained in Exhibit E of the TIF Plan. The previously approved Resolution and Ordinance identified that the proposed land uses and density are consistent with the City's Comprehensive Plan by meeting goals for a pedestrian-friendly environment and improving auto-oriented design patterns present in much of the city, encouraging successful mixed-use development, and ensuring that public realm design respects community character and creates high quality experiences for pedestrians, cyclists, transit users, and motorists. The proposal meets the City's criteria for PUD zoning and also addresses many of the Greater Southdale Area Design Experience Guidelines including the division of the property into smaller blocks providing pedestrian and vehicle access and connections through the site, close conformity to the street typologies, no visible parking stalls from 70th Street or France Avenue, and the provision of public space that makes up 26% of the site. Resolution 2022-26 Page 6 4. Finding that the Tax Increment Financing Plan for the 70th and France 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. Through the implementation of the TIF Plan, the City will provide an impetus for the renovation of substandard and underutilized property, construction of a new mixed-use private development which will result in increased employment within the City and the State of Minnesota, an increase in tax base of the State, and add a high-quality development to the City of Edina, STATE OF MINNESOTA COUNTY OF HENNEPIN SS CITY OF EDINA CERTIFICATE OF CITY CLERK I, the undersigned duly appointed and acting City Clerk 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 March 22, 2022, and as recorded in the Minutes of said regular meeting. WITNESS, my hand and seal of said City this day of , 2022. Sharon Allison, City Clerk