12-14-1998 EDA Packet - Laserfiche WebLink

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TIF District Overview The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for District No. 1-9 as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: 1. Finding that the District No. 1-9 is an economic development district as defined in M.S., Section 469.174, Subd. 12. Tax Increment Financing District No. 1-9 consist of several parcels within the City's Development District No. 1, delineated in the Plan, for the purpose of financing economic development in the City through the use of tax increment. District No. 1-9 consists of a portion of Development District No. 1 not meeting requirements for other types of tax increment financing districts, which is in the public interest because it will facilitate construction of a manufacturing facility for Midwest Veneer, H.L. Mesabi, Lino Lakes Business Center Phases 5, 6, and 7, and additional manufacturing development which will discourage commerce, industry, or manufacturing from moving their operations to another state or municipality; it will increase employment in the state, and preserve and enhance the tax base of the state. 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 marker 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 District No. 1-9 permitted by the 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 development proposed in this plan is a manufacturing facility that meets the City's objectives for economic development. The cost of land acquisition, site and public improvements and utilities makes development of the facility infeasible without City assistance. The developers have asked for and provided a letter as justification that the developer would not have gone forward without tax increment assistance ( see attachment in Appendix F). The increased market value of the site that could reasonable 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 T1F District permitted by the Plan: The City supported this finding on the grounds that the cost of land acquisition, site and public improvements and utilities add to the total development cost. Historically, site development costs in this area have made development infeasible without tax increment assistance. This site has been marketed for at least 8 years without success. Therefore, the City reasonably determines that no other development of any kind is anticipated on this site without substantially similar assistance being provided to the development. Accordingly, the increased market value anticipated without tax increment assistance is $0. A comparative analysis of estimated market values both with and without establishment of Tax Increment Financing District No. 1-9 and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in District No. 1-9, the total increased market value would be up to $29,641,900. The present value of tax increments from District No. 1-9 is estimated to be $2,276,967. It is the Council's finding that no development with a market value of greater than $26,254,455 would occur without tax increment assistance in this district within 9 years. This finding is based upon evidence from general past experience with the high cost of acquisition and public improvements in the general area of District No. 1-9 (see Cashflow in Appendix D). 3. Finding that the Tax Increment Financing Plan for District No. 1-9 conforms to the general plan for the Page 3 2/Z ' d S31d I OOSSU '8 Sd31H3 WU82 :0I 86, 60 OM