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HomeMy WebLinkAboutResolution No. 2014-023 Redevelopment Plan Southeast Edina Modification Pentagon Park TIF CITY OF EDINA HENNEPIN COUNTY STATE OF MINNESOTA Council member Swenson introduced the following resolution and moved its adoption: RESOLUTION NO. 2014-23 ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE SOUTHEAST EDINA REDEVELOPMENT PROJECT AREA; AND ESTABLISHING THE PENTAGON PARK TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Edina, Minnesota (the "City"), as follows: Section 1. Recitals 1.01. The Board of Commissioners of the Edina Housing and Redevelopment Authority (the "HRA") has heretofore established the Southeast Edina Redevelopment Project Area and adopted the Redevelopment Plan therefor. It has been proposed by the HRA and the City that the City adopt a Modification to the Redevelopment Plan for the Southeast Edina Redevelopment Project Area (the "Redevelopment Plan Modification") and establish the Pentagon Park Tax Increment Financing District (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Modification and Plan"); 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 Modification and Plan, and presented for the Council's consideration. 1.02. The HRA and City have investigated the facts relating to the Modification and Plan and have caused the Modification and Plan to be prepared. 1.03. The HRA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Modification and Plan, including, but not limited to, notification of Hennepin County and Independent School District No. 273 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Modification and Plan by the City Planning Commission, approval of the Modification and Plan by the HRA on February 18, 2014, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Modification and Plan and to the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to CITY OF EDINA 4801 West 50th Street• Edina,Minnesota 55424 www.EdinaMN.gov•952-927-8861 • Fax 952-826-0389 Resolution No. 2014-23 Page 2 the Council and/or made a part of the City files and proceedings on the Modification and Plan. The Reports, including the redevelopment qualifications reports and planning documents, 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 Southeast Edina Redevelopment Project Area, but is however, modifying the Redevelopment Plan therefor. 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 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 Pentagon Park Tax Increment Financing District 3.01. The Council hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, Subd. I 0 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 District permitted by the Tax Increment Financing Plan, that the Modification and Plan conform to the general plan for the development or redevelopment of the City as a whole; and that the Modification and Plan will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the 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 Edina Housing and Redevelopment Authority elects to calculate fiscal disparities for the 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 District. Section 4. Public Purpose 4.01. The adoption of the Modification and Plan 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 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 this development financially feasible. As such, Resolution No. 2014-23 Page 3 any private benefits received by a developer are incidental and do not outweigh the primary public benefits. Section 5. Approval and Adoption of the Modification and Plan 5.01. The Modification and Plan, 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 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 Modification and Plan 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 District, as described in the Modification and Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the Edina Housing and Redevelopment Authority 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 District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The Executive Director is further authorized and directed to file a copy of the Modification and Plan 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 Sprague, and upon a vote being taken thereon, the following voted in favor thereof: Members Bennett, Brindle, Sprague, Swenson and Mayor Hovland; and the following voted against the same: none. Dated: Fe ary 8, 2014 2_ `` Attest: �— Debra A. Mangen, City Clerk �� James B. Hovland, Mayor 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 and foregoing Resolution was duly adopted by the Edina City Council at its Regular Meeting of March 4, 2014,and as recorded in the Minutes of said Regular Meeting. WITNESS my hand and seal of said City this day of City Clerk . . Resolution No. 2014-23 Page 4 EXHIBIT A The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for Pentagon Park Tax Increment Financing District (District), as required pursuant to Minnesota Statutes, Section 469.1 75, Subdivision 3 are as follows: I. Finding that the Pentagon Park Tax Increment Financing District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10. The District consists of 16 parcels, with plans to redevelop the area for commercial/industrial purposes. At least 70 percent of the area of the parcels in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. (See Appendix F 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 redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. Specifically, the redevelopment will result in job creation opportunities, enhanced public improvements, better management of storm water, and increased green space on the privately owned parcels. The developer has demonstrated that the costs of soils corrections, structured parking, demolition, and street/sidewalk improvements make this project is feasible only through assistance, in part, from tax increment financing. The developer has already applied for and been granted and will continue to apply for State and Metropolitan Council funding for redevelopment costs. The developer was asked for and provided a proforma as justification that the development would not have gone forward without tax increment assistance. (See attachment in Appendix G of the TIF Plan.) 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: The property has operated for the last several years as a lower rent office development. The current owner of the site has demonstrated that small amounts of private investment would make the existing structures commercially viable for an extended period of time. However, the City and the developer's vision is for much higher quality work spaces and hospitality opportunities that require significant upgrades to the stability of the soils and the infrastructure in the area. Another new use is not likely to be able to afford the costs of demolition and soils stabilization, especially on the scale of the proposed development, 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. Resolution No. 2014-23 Page 5 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 increase in market value will be $421,890,074 (see Appendix D of the TIF Plan) 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 $65,325,714 (see Appendix D of the TIF Plan). 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 market value increase greater than $356,564,360 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the 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 found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Southeast Edina Redevelopment Project Area by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State and add a high quality development to the City.