04-10-2013 Council Agenda - Laserfiche WebLink

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(AS MODIFIED APRIL 10, 2013) The reasons and facts supporting the findings for the adoption of a Modification to the Tax Increment Financing Plan (TIF Plan) for Tax Increment Financing District No. 6 -1 (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the area added to Tax Increment Financing District No. 6 -1 is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a)(1). The TIF Plan Modification adds 2 parcels and the adjacent easement property and internal rights - of -way to the existing District, with plans to redevelop the area to facilitate the construction of 15 units of single family housing. 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 ofthe 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 lax increments for the maximum duration of the District permitted by the TIE Plan. The proposed development, in the opinion ofthe City, would not reasonably be expected to occursolely 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. The main purpose of the TIF Plan Modification is to add 2 parcels and the adjacent easement property and internal rights -of -way to the City's TIE District No. 6 -1. The addition of the parcels to the District will further enable the redevelopment within the District and further the goals set in the establishment of TIF District No. 6 -1. Due to the high cost of land currently occupied by substandard buildings and public improvements, this project is feasible only through assistance, in part, from tax increment financing. To assist the developer in acquiring the property, the City has contributed 50% of the purchase price to write -down the cost of the land. The cost of a new lot with all land costs, demolition and site improvements exceeds the sates value without tax Increment financing. (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:This finding is justified on the grounds that the cost of land adds to the total redevelopment cost. Historically, site development costs in this area have made redevelopment infeasible without tax increment assistance. Redevelopment of this site has been attempted in the past without success. 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. APPENDIX G3