HomeMy WebLinkAbout07-05-2016 Council Packet*WORK SESSION AGENDA
CITY OF LINO LAKES
Tuesday, July 5, 2016
CITY COUNCIL WORK SESSION
Community Room (not televised)
6:00 P.M.
1. Woods Edge Townhome Development, Michael Grochala, Kendra Lindahl
2. Clearwater Creek Business Park TIF, Michael Grochala, Mikaela Huot
3. Discuss Condensing Units Repair/Replacement Options, Rick DeGardner
4. Discussion about Agrihoods, Melissa Maher
5. Proposal to Reinstate Office Specialist Position to Full-Time Hours, Jeff Karlson
6. Council Updates on Boards/Commissions
7. Monthly Progress Report
8. Review Regular Agenda
9. Adjourn
1
WS – Item #1
WORK SESSION STAFF REPORT
Work Session Item No. 1
Date: July 5, 2016
To: City Council
From: Kendra Lindahl, Landform
Re: Woods Edge Development Update
Background
The applicant has submitted a land use application for PUD Development
Stage/Preliminary Plat review and a text amendment for the “Lino Lakes Town Center
Design & Development Guide”. The proposed development is a 112 unit attached
townhome project on 11.2 acres in the Town Center (Outlots B and D of the Village No.
3). The proposed project is called “Woods Edge”.
The property is guided Mixed Use and is part of the Town Center, which is planned for a
mix of residential, retail, and office uses. The site is zoned PUD (Planned Unit
Development) and the zoning standards are established by the Town Center Design &
Development Guide PUD, which was approved on March 22, 2004. The guide includes a
land use plan and this site is the bulk of the planned residential area.
The Planning & Zoning staff report dated June 8, 2016 details the project. Overall,
Woods Edge is consistent with the comprehensive plan and compliant with the EAW and
city ordinances. At the July 5, 2016 Council Work Sessions, staff will review in detail the
Ordinance Text Amendment and PUD Development Stage Plan/Preliminary Plat. At the
July 11, 2016 City Council meeting, staff will be requesting Council action on these
items.
Tentative Review Schedule:
Complete Application Date: May 9, 2016
Environmental Board Meeting: May 25, 2016
EDAC Meeting: June 2, 2016
Park Board Meeting: June 6, 2106
P & Z Board Meeting: June 8, 2016
City Council Work Session July 5, 2016
City Council Meeting: July 11, 2016
60-Day Review Date: July 8, 2016
60-Day Extension: September 6, 2016
2
Requested Council Direction
None. Review of June 13, 2016 Council action items only.
Attachments
1. Site Plan dated June 2, 2016
Phone (952) 937-5150 7699 Anagram Drive
Fax (952) 937-5822 Eden Prairie, MN 55344
Toll Free (888) 937-5150
WS – Item 2
WORK SESSION STAFF REPORT
Work Session Item No. 2
Date: July 5, 2016
To: City Council
From: Michael Grochala, Community Development Director
Re: United Properties 35E Distribution Center/TIF request
Background
Staff has been working with United Properties regarding construction of a
warehousing/distribution facility along 35E for the past six months. This has been
previously discussed with EDAC, Planning & Zoning board and City Council due to both
its economic development potential and zoning related site issues.
United Properties submitted a request for rezoning to Planned Unit Development,
Development Stage Plan Approval and Preliminary Plat approval for the 56 acre
Clearwater Creek Business Park. The proposed plat includes one 30-acre lot for a
proposed distribution center and two outlots for future development. The Planning and
Zoning board held a public hearing on June 8, 2016 which was continued for further
discussion on July 13, 2016.
The proposed distribution facility is approximately 402,552 square feet in area. United
Properties is constructing the facility to house the growing operations of Distribution
Alternatives. Distribution Alternatives moved to Lino Lakes in 2004 and is currently
located in the Marshan Industrial Park. The company currently employees 120 full time
employees.
Development of the site will require the extension of 21st Avenue, from Commerce
Avenue to approximately 2,100 feet south. Extension of the street includes the crossing
of Clearwater Creek and filling and mitigation of floodplain areas adjacent to the creek.
21st Avenue is planned to be extended to Cedar Street, further to the south, in the
Comprehensive Plan. The project proposes to dedicate right of way for the entire length
of the roadway.
The total project cost is approximately $24,000,000 with an estimated building/site value
of $18,200,000. Due to costs associated with the street extension, floodplain mitigation
and necessary soil corrections, the developer is requesting public assistance in the form of
Tax Increment Financing (TIF).
Over the past 20 years the City has used TIF to facilitate development of nearly 1 million
square feet of industrial space adding $65,000,000 in new valuation. The proposed
project would be the largest completed in Lino Lakes to date. As previously discussed
the project would require the establishment of a new TIF District and satisfaction of the
City’s business subsidy requirements. Staff is proposing the establishment of a new
Economic Development District. Economic Development districts have a maximum
term of eight years from the date of first increment received.
The developer has identified $5.9 million in eligible TIF project costs and has requested
assistance in the amount of $2,088,481. Based on our review of the financing need and
gap for this project, as well as the City’s policy practice to limit the duration of tax
increment to between 5-6 years, staff is proposing to limit the assistance to $1.2 million.
This would result in approximately 5.5 years of increment. Funding would be provided
by “pay as you go financing”. The developer will pay costs with its own funds. The
increments are used to reimburse the developer for these costs.
One unique component of the development will be the establishment of two distinct job
and wage goal requirements. Due to the existing “Green Acres” property tax designation
the facility must meet more restrictive conditions. To meet the tax increment district
requirements the tenant will need to pay 90% of the employees of the facility a wage rate
of 160% of federal minimum wage ($11.60/hour). The City’s Business Subsidy Policy
sets the wage goal at 110% of the federal minimum wage. Staff is proposing a minimum
job goal of 60 at this rate. Failure to meet either of the job goals would result in
termination of tax increment for the project.
The applicant will still be subject to all city fees including building permits, trunk utility
and park dedication requirements.
Project Timeline
Date Event
July 5, 2016 City Council Work Session
July 7, 2016 EDAC meeting
July 13, 2016 Planning & Zoning Board PUD Public Hearing
July 25, 2016 City Council holds Public Hearing and considers TIF Plan
and TIF District
July 25, 2016 City Council considers Rezone, Preliminary Plat
July 25, 2016 EDA holds Public Hearing for Business Subsidy and
considers development contract
Mikaela Huot from Springsted Inc., the City’s financial consultant, will be at the meeting
to provide an overview of TIF financing, review the TIF plan and discuss the proposed
project.
Requested Council Direction
None required. Discussion only.
Attachments
1. Springsted Memo
2. Draft TIF Plan
3. Distribution Facility Site Plan
4. Exterior Building Rendering
MEMORANDUM
TO: Michael Grochala, Community Development Director
FROM: Mikaela Huot, Vice President/Consultant
DATE: July 1, 2016
SUBJECT Proposed Tax Increment Financing (Economic Development) District No. 1-12
Project Summary Memo
The City of Lino Lakes received an application for financial assistance through Tax Increment Financing (TIF) with
financing a portion of the extraordinary development costs related to the development of a large 402,000 square foot,
office headquarters and warehouse building for Distribution Alternatives. The developer, United Properties, is
proposing the construction of the project as the tenant (Distribution Alternatives) has outgrown its current space and
needs expansion. The purpose of this memorandum is to provide a summary of Springsted’s review of the
development project costs and operating pro forma as provided by the developer in order to assist the City with
making a determination if the project as proposed would be unlikely to proceed “but-for” the requested Tax Increment
Financing (TIF) assistance.
Background
The developer submitted a request for TIF assistance with the purpose of using tax increment to finance
extraordinary costs associated with construction of the project. The new assessed value of the building has been
estimated to be approximately $18.2 million upon completion based on an approximate 402,000 square foot facility.
Developer Request for Assistance
Assistance has been requested for financing a portion of the costs associated with construction of the project. The
developer has proposed the $24 million project will be funded by an estimated $6.5 million of equity and $15.3 million
of private financing with a TIF request of $2.088 million to finance extraordinary project costs. The City’s preference
would be to provide any financial assistance through pay-as-you-financing as reimbursement for extraordinary
development costs. The developer has indicated the receipt of City financial assistance is necessary for the project to
proceed and meet debt coverage and value assumptions. The developer’s request for assistance ($2.088 million) is
equal to approximately 8.67% of total project costs. See complete sources and uses (current information as
presented to Springsted by the developer) below from the application:
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101-2887
Tel: 651-223-3000
Fax: 651-223-3002
www.springsted.com
City of Lino Lakes, Minnesota
Summary of TIF District No. 1-12
July 1, 2016
Page 2
Sources Amount Uses Amount
Equity $6,598,543 Acquisition $2,181,162
Debt $15,396,600 Site Improvements $2,800,000
TIF $2,088,481 Public Infrastructure Costs $977,373
Building Costs $14,153,101
Soft Costs $3,006,441
Financing Costs $565,547
Contingencies $400,000
Total $24,083,624 Total $24,083,624
Following initial conversations with the developer, the amount of project costs eligible for reimbursement for tax
increment could include the following:
Uses Amount
Land Acquisition $2,181,162
Offsite Improvements (Public Infrastructure Costs) $977,373
Grading/Excavating/Soil Corrections $2,800,000
Total $5,958,535
Based on the City’s past practice and financing need and gap for this project, the estimated total amount of
assistance for public infrastructure and extraordinary site improvement costs related to construction of the project will
be limited to $1,200,000.
Tax Increment Assumptions
Springsted made certain assumptions to calculate the estimated amount of tax increment revenue generated by the
proposed new project. Those assumptions include the following:
Maximum TIF District term – 8 years after receipt of first increment
o 9 total years of collection
Base value of land:
o PID: 24-31-22-34-0001: 155,800
o PID: 24-31-22-34-0002: $3,400
o PID: 24-31-22-31-0001: $173,600
o PID: 24-31-22-31-0002: $100
o PID: 24-31-22-31-0003: $100
Total new value includes land and building
$18,200,000
Based on County value estimate
City of Lino Lakes, Minnesota
Summary of TIF District No. 1-12
July 1, 2016
Page 3
Construction commences in 2016
o 50% complete by December 31, 2016
Partial value as of January 2, 2017 for taxes payable 2018
o 100% complete prior to December 31, 2017
Full value as of January 2, 2018 for taxes payable 2019
Payable 2016 tax rates remain constant through term (Rates Provided by Anoka County)
o City : 46.019%
o County: 38.894%
o School: 36.426%
o Other: 6.405%
o Total 127.744%
Class rates remain constant through term
o Commercial-industrial
o 1.5% first $150,000 and 2% value above $150,000
Fiscal disparities contribution
o Required to be from properties within district
o 37.589%
2% annual market value inflator assumed
Present Value assumptions
Tax Increment Revenue Estimates
Estimated Market Value $18,200,000
Estimated Gross Revenue $2,603,627
5% withheld for admin. $130,181
15% withheld for pooling $390,544
Estimated Net Revenue $2,082,902
Developer Assistance
80% pledged to developer $1,200,000
Number of Years 5.5 years
Surplus (remaining increment) $882,902
Project Qualifications
Tax Increment Financing (TIF) District – Economic Development
Economic development districts must consist of a project that is in the public interest because:
It will discourage commerce, industry, or manufacturing from moving their operations to another state
It will result in increased employment
City of Lino Lakes, Minnesota
Summary of TIF District No. 1-12
July 1, 2016
Page 4
It will result in preservation and enhancement of the tax base
Revenue derived from tax increment from an economic development district may not be used to provide
improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form to developments consisting
of buildings and ancillary facilities, if more than 15 percent of the buildings and facilities (determined on the basis of
square footage) are used for a purpose other than:
the manufacturing or production of tangible personal property, including processing resulting in the
change in condition of the property;
warehousing, storage, and distribution of tangible personal property, excluding retail sales;
research and development related to the activities listed in clause (1) or (2);
telemarketing if that activity is the exclusive use of the property;
tourism facilities;
qualified border retail facilities; or
space necessary for and related to the activities listed in clauses (1) to (6).
In addition, if any of the property is currently within the property tax classification of ‘green acres’ pursuant to MN
Statutes, Section 273.111, 273.112, 273.114, or chapter 473H, the following provisions apply:
The authority may include in a tax increment financing district for taxes payable in any of the five calendar
years before the filing of the request for certification only for:
a district in which 85 percent or more of the planned buildings and facilities (determined on the basis of
square footage) are a qualified manufacturing facility or a qualified distribution facility or a combination of
both; or
a housing district.
A distribution facility means buildings and other improvements to real property that are used to conduct
activities in at least each of the following categories:
o to store or warehouse tangible personal property;
o to take orders for shipment, mailing, or delivery;
o to prepare personal property for shipment, mailing, or delivery; and
o to ship, mail, or deliver property.
A manufacturing facility includes space used for manufacturing or producing tangible personal property,
including processing resulting in the change in condition of the property, and space necessary for and
related to the manufacturing activities.
To be a qualified facility, the owner or operator of a manufacturing or distribution facility must agree to pay
and pay 90 percent or more of the employees of the facility at a rate equal to or greater than 160 percent of
the federal minimum wage for individuals over the age of 20.
Thank you for the opportunity to be of assistance to the City of Lino Lakes. Please contact me at 651-223-3036 or
mhuot@springsted.com with any questions or to discuss.
City of Lino Lakes, Minnesota
Lino Lakes Economic Development Authority
Tax Increment Financing Plan
for
Tax Increment Financing (Economic Development)
District No. 1-12
Within
Development District No. 1
(Clearwater Creek Business Park Project)
Draft Dated: July 1, 2016
Public Hearing: Monday, July 25, 2016
Anticipated Approval Date: Monday, July 25, 2016
Prepared by:
SPRINGSTED INCORPORATED
380 Jackson Street, Suite 300
St. Paul, MN 55101-2887
(651) 223-3000
WWW.SPRINGSTED.COM
TABLE OF CONTENTS
Section Page(s)
A. Definitions ..................................................................................................................... 1
B. Statutory Authorization ..................................................................................................... 1
C. Statement of Need and Public Purpose ................................................................................ 1
D. Statement of Objectives .................................................................................................... 1
E. Designation of Tax Increment Financing District as an Economic Development District .................... 2
F. Duration of the TIF District ................................................................................................. 3
G. Property to be Included in the TIF District.............................................................................. 3
H. Property to be Acquired in the TIF District ............................................................................. 4
I. Specific Development Expected to Occur Within the TIF District ................................................. 4
J. Findings and Need for Tax Increment Financing ..................................................................... 4
K. Estimated Public Costs ..................................................................................................... 6
L. Estimated Sources of Revenue .......................................................................................... 6
M. Estimated Amount of Bonded Indebtedness .......................................................................... 7
N. Original Net Tax Capacity ................................................................................................. 7
O. Original Tax Capacity Rate ................................................................................................ 7
P. Projected Retained Captured Net Tax Capacity and Projected Tax Increment ............................... 8
Q. Use of Tax Increment ....................................................................................................... 8
R. Excess Tax Increment ...................................................................................................... 9
S. Tax Increment Pooling and the Five Year Rule ....................................................................... 9
T. Limitation on Administrative Expenses ............................................................................... 10
U. Limitation on Property Not Subject to Improvements - Four Year Rule ....................................... 10
V. Estimated Impact on Other Taxing Jurisdictions ................................................................... 11
W. Prior Planned Improvements ............................................................................................ 11
X. Development Agreements ............................................................................................... 11
Y. Assessment Agreements ................................................................................................ 12
Z. Modifications of the Tax Increment Financing Plan ................................................................ 12
AA. Administration of the Tax Increment Financing Plan .............................................................. 12
AB. Financial Reporting and Disclosure Requirements ................................................................ 13
Map of the Tax Increment Financing District ....................................................................................... EXHIBIT I
Assumptions Report ........................................................................................................................... EXHIBIT II
Projected Tax Increment Report ......................................................................................................... EXHIBIT III
Estimated Impact on Other Taxing Jurisdictions Report...................................................................... EXHIBIT IV
Market Value Analysis Report ............................................................................................................. EXHIBIT V
Lino Lakes Economic Development Authority, Minnesota
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Section A Definitions
The terms defined in this section have the meanings given herein, unless the context in which they are used indicates
a different meaning:
"Authority" means the Lino Lakes Economic Development Authority.
"City" means the City of Lino Lakes, Minnesota; also referred to as a "Municipality".
"City Council" means the City Council of the City; also referred to as the "Governing Body".
"County" means Anoka County, Minnesota
"Development District" means Development District No. 1 in the City, which is described in the corresponding
Development Program.
"Development Program" means the Development Program for the Development District.
"Project Area" means the geographic area of the Development District.
"School District" means Independent School District No. 12, Minnesota.
"State" means the State of Minnesota.
"TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, both inclusive.
"TIF District" means Tax Increment Financing (Economic Development) District No. 1-12.
"TIF Plan" means the tax increment financing plan for the TIF District (this document).
Section B Statutory Authorization
The Development District Act authorizes the City and Authority, upon certain public purpose findings by the City
Council, to establish and designate development districts within the City and to develop and administer development
programs therefore to meet the needs and accomplish the public purposes specified in Section C. In accordance with
the purposes set forth in Section 469.124 of the Development District Act, the City Council and Authority have
established the Development District comprising the area described in Section E and have adopted this Development
Program.
Section C Statement of Need and Public Purpose
The City Council and Authority have determined that there is a need for the City to take certain actions they deem
necessary in order to encourage, ensure and facilitate development and redevelopment by the private sector of
underutilized, inappropriately used and unused land located within the corporate limits of the City. Such actions are
necessary in order to provide additional employment opportunities for residents of the City and the surrounding area;
to improve the tax base of the City, the County and the School District, thereby enabling them to better provide
needed public services; and to improve the general economy of the City, the County and the State.
Section D Statement of Objectives
The Authority seeks to achieve the following objectives through the establishment of TIF District No. 1-12;
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 2
1. redevelop blighted areas as identified
2. provide employment opportunities within the community.
3. improve the tax base of Lino Lakes and the general economy of the City and State;
4. implement relevant portions of the Comprehensive Plan.
The Authority’s specific purpose in establishing TIF District No. 1-12 is to aid in the construction of a large
warehousing/distribution facility that will comprise of 402,000 square feet. The Authority intends to use increment
generated by the new development to assist with financing a portion of the extraordinary site improvements and soil
correction costs and significant offsite improvements that include streets, public utilities, and public improvements to
gain access to the site.
Section E Designation of Tax Increment Financing District as an
Economic Development District
Economic development districts are a type of tax increment financing district which consist of any project, or portions
of a project, which the Authority finds to be in the public interest because:
(1) it will discourage commerce, industry, or manufacturing from moving their operations to
another state or municipality;
(2) it will result in increased employment in the state; or
(3) it will result in preservation and enhancement of the tax base of the state.
The TIF District qualifies as an economic development district in that the proposed development described in this TIF
Plan (see Section I) meets the criteria listed above in (1), (2) and (3). Without establishment of the TIF District, the
proposed development would not occur within the City. The proposed development will also result in increased
employment and enhancement of the tax base in both the City and the State.
Tax increments from an economic development district must be used to provide improvements, loans, subsidies,
grants, interest rate subsidies, or other assistance in which at least 85% of the square footage of the facilities to be
constructed are used for any of the following purposes:
(1) manufacturing or production of tangible personal property, including processing, resulting in the
change of the condition of the property;
(2) warehousing, storage and distribution of tangible personal property, excluding retail sales;
(3) research and development related to the activities listed in (1) or (2) above;
(4) telemarketing if that activity is the exclusive use of the property;
(5) tourism facilities (see M.S. Section 469.174, Subd. 22);
(6) qualified border retail facilities (see M.S. Section 469.176, Subd. 4c); or
(7) space necessary for and related to the activities listed in (1) through (6) above.
Tax increments from the TIF District will be used to provide financial assistance to the proposed development (see
Section I), in which over 85% of the square footage of the facilities to be constructed will be used for warehousing,
storage and distribution of tangible personal property, excluding retail sales as listed in (2) above. In addition, the
parcels to be included within the district have qualified for inclusion under the provisions of chapter 473H in the
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 3
previous five calendar years before the filing of the request for certification only and therefore the project must meet
the following qualifications:
(1) a district in which 85 percent or more of the planned buildings and facilities (determined on the basis of
square footage) are a qualified manufacturing facility or a qualified distribution facility or a combination of both; or
(2) a housing district.
A distribution facility means buildings and other improvements to real property that are used to conduct activities in at
least each of the following categories:
(i) to store or warehouse tangible personal property;
(ii) to take orders for shipment, mailing, or delivery;
(iii) to prepare personal property for shipment, mailing, or delivery; and
(iv) to ship, mail, or deliver property.
A manufacturing facility includes space used for manufacturing or producing tangible personal property, including
processing resulting in the change in condition of the property, and space necessary for and related to the
manufacturing activities.
To be a qualified facility, the owner or operator of a manufacturing or distribution facility must agree to pay and pay 90
percent or more of the employees of the facility at a rate equal to or greater than 160 percent of the federal minimum
wage for individuals over the age of 20.
The proposed project will be a qualified distribution facility.
Section F Duration of the TIF District
Economic development districts may remain in existence 8 years from the date of receipt by the Authority of the first
tax increment. The Authority anticipates that the TIF District may remain in existence the maximum duration allowed
by law (projected to be through the year 2026). However the Authority will decertify the TIF District earlier upon
fulfillment of all District obligations.
Section G Property to be Included in the TIF District
The TIF District is an approximate 42 acre area of land located within the Project Area. A map showing the location
of the TIF District is shown in Exhibit I. The boundaries and area encompassed by the TIF District are described
below:
Parcel ID Number Legal Description
24-31-22-34-0001
THE SE1/4 OF SW1/4 OF SEC 24 TWP 31 RGE 22, EX THAT PRT OF FOL
DESC TRACT LYG WITHIN SD 1/4 1/4: A STRIP OF LAND 25 FT IN WIDTH
ON EACH SIDE OF FOL DESC C/L: BEG AT A STAKE ON E LINE OF SD
SEC 2421.5 FT S OF E1/4 COR THEREOF, TH S 52 DEG 27 MIN W 4599.2
FT TO A STAKE ON S LINE OF SD SEC 1592.7 FT E OF SW COR THEREOF
& THERE TERM, EX RDS, SUBJ TO EASE OF REC
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 4
24-31-22-34-0002
TTH PRT OF SE1/4 OF SW1/4 OF SEC 24-31-22 LYG WITHIN A 50 FT WIDE
STRIP WITH A C/L DESC AS FOL: BEG AT A PT ON E LINE OF SD SEC
21.5 FT S OF E1/4 COR THEREOF, TH S 52 DEG 27 MIN W 4599.2 FT TO A
PT ONS LINE OF SD SEC 1592.7 FT E OF SW COR THEREOF & THERE
TERM; EX RDS; SUBJ TO EASE OF RECHE SE1/4 OF SW1/4 OF SEC 34
TWP 31 RGE 22, EX THAT PRT OF SD 1/4 1/4 LYG SELY OF CSAH NO 32,
ALSO EX E 594 FT OF N 885.5 FT THEREOF, EX RD, SUBJ TO EASE OF
REC
24-31-22-31-0001 * THE NE1/4 OF SW1/4 OF SEC 24 TWP 31 RGE 22, EX THAT PRT THEREOF
LYG WLY OF FOL DESC LINE: BEG AT A PT ON N LINE OF SD 1/4 1/4 16.5
FT ELY OF NW COR THEREOF, TH SLY TO SW COR OF SD 1/4 1/4 & SD
LINETHERE TERM, EX RD, SUBJ TO EASE OF REC
24-31-22-31-0002 THAT PRT OF NE1/4 OF SW1/4 OF SEC 24 TWP 31 RGE 22 LYG S OF ELY
EXTN OF N LINE OF S 662.45 FT OF NW1/4 OF SD 1/4 & LYG WLY OF FOL
DESC LINE: BEG AT A PT ON N LINE OF SD NE1/4 16.5 FT ELY OF NW
COR THEREOF, TH SLY TO SW COR OF SD 1/4 1/4 & THERE TERM, SUBJ
TO EASE OF REC
24-31-22-31-0003 THAT PRT OF NE1/4 OF SW1/4 OF SEC 24 TWP 31 RGE 22 LYG NLY OF
ELY EXTN OF N LINE OF S 662.45 FT OF NW1/4 OF SD 1/4 & LYG WLY OF
FOL DESC LINE: BEG AT A PT ON N LINE OF SD NE1/4 16.5 FT ELY OF
NW COR THEREOF, TH SLY TO SW COR OF SD 1/4 1/4 & THERE TERM,
SUBJ TO EASE OF REC
‘* parcel will be split and only a portion will be included within the TIF District.
The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent
to the property described above.
Section H Property to be Acquired in the TIF District
The Authority may acquire and sell any or all of the property located within the TIF District; however, the Authority
does not anticipate acquiring any such property at this time.
Section I Specific Development Expected to Occur Within the TIF District
The proposed development is expected to consist of the construction of a new 402,000 square foot warehousing and
distribution facility for Distribution Alternatives within the City of Lino Lakes. The development will result in increased
tax base and employment within the City, in compliance with statutory requirements. It is anticipated tax increment
will be used to finance a portion of the extraordinary site development, public improvement, and infrastructure costs
related to the project. In addition, the Authority anticipates using available tax increment for related administrative
expenses and any other eligible expenditures associated with the development of the site.
Construction of the facility is projected to start in summer/fall of 2016 and is expected to be fully constructed by
December 31, 2017, and be 100% assessed and on the tax rolls as of January 2, 2018 for taxes payable in 2019.
At the time this document was prepared there were no signed construction contracts with regards to the above
described development.
Section J Findings and Need for Tax Increment Financing
In establishing the TIF District, the City makes the following findings:
Lino Lakes Economic Development Authority, Minnesota
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(1) The TIF District qualifies as an economic development district;
See Section E of this document for the reasons and facts supporting this finding.
(2) 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, and the increased market value of
the site that could reasonably be expected to occur without the use of tax increment 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 TIF District permitted by
the TIF Plan.
Factual basis:
Proposed development not expected to occur:
The project includes the development of a new large 402,000 warehouse and distribution facility in an
undeveloped area of the City. The proposed developer of the site has submitted information to the city
demonstrating that the development of this site is not financially feasible without the assistance provided in
this TIF Plan.
The City has determined that the proposed development would not occur but for the financial assistance
provided in this TIF Plan because of the high cost of construction at the site due to the need for significant
site development and public improvement infrastructure costs necessary for development to occur. Due to
the high costs of investment for the proposed project, including site improvements, public improvements, soil
correction, and infrastructure costs that would be incurred by the developer in conjunction with development
of the project, the developer has stated that the project as proposed would not occur without the financial
provided by the City, as it would not be economically feasible without financial assistance. The City finds the
use of tax increment necessary to finance a portion of the site improvement, public infrastructure, soil
correction and infrastructure costs to facilitate development of the project and developer investment. The
City anticipates providing financial assistance on a pay-as-you-go basis.
No higher market value expected:
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 TIF District permitted by the TIF Plan. Without the improvements the City has no reason to expect that
significant development would occur without assistance similar to that provided in this plan. For the same
reasons that the desired development described above is not feasible without tax increment assistance, the
City believes that no alternative development is likely to occur without similar assistance.
To summarize the basis for the City’s findings regarding alternative market value, in accordance with
Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations:
a. The City’s estimate of the amount by which the market value of the site will increase without the
use of tax increment financing is $0 (for the reasons described above), except some unknown
amount of appreciation.
b. If the proposed development to be assisted with tax increment occurs in the District, the
total increase in market value would be approximately $20,782,140 including the value of the
building (See Exhibit V).
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 $2,025,557 (See Exhibit V).
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 6
d. Even if some development other than the proposed development were to occur, the City
finds that no alternative would occur that would produce a market value increase greater than
$18,756,583 (the amount in clause b less the amount in clause c) without tax increment assistance.
(3) The TIF Plan would afford maximum opportunity, consistent with the sound needs of the City as a
whole, for development of the Project Area by private enterprise.
Factual basis: The proposed development is the construction of a new large warehousing and distribution
facility in the Project Area that is expected to retain existing jobs as well as create new jobs in the City, plus
create new tax base for the City and the State. The development meets the City’s economic development
goals in terms of tax base expansion, job retention, and wage levels.
(4) The TIF Plan conforms to general plans for development of the City as a whole.
Factual basis: The City has determined that the development proposed in the TIF Plan conforms to the
City comprehensive plan.
Section K Estimated Public Costs
The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax
increments of the TIF District.
Land/Building Acquisition
Site Improvements/Preparation Costs
$0
$1,105,529
Installation of Public Infrastructure Improvements
Other Qualifying Improvements
Administrative Costs
Loan Interest Costs
$977,373
$390,544
$130,181
$0
Total $2,603,627
The City anticipates using tax increment to the extent available to assist with financing a portion of the site
improvements and infrastructure costs, related administrative expenses, and other TIF-eligible expenditures as
necessary and related to development of the project.
The City reserves the right to administratively adjust the amount of any of the items listed above or to incorporate
additional eligible items, so long as the total estimated public cost is not increased.
Section L Estimated Sources of Revenue
Tax increment revenue $2,603,627
Interest on invested funds 0
Loan proceeds 0
Special assessments 0
Rent/lease revenue 0
Grants 0
Total $2,603,627
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 7
The Authority anticipates providing financial assistance on a pay-as-you-go basis for site improvement and
infrastructure costs, as well as other TIF-eligible expenses related to the proposed development. As tax increments
are collected from the TIF District in future years, a portion of these taxes will be used by the Authority to reimburse
the developer/owner for public costs incurred (see Section K).
The Authority reserves the right to finance any or all public costs of the TIF District using pay-as-you-go assistance,
internal funding, general obligation or revenue debt (referred to together as “TIF Bonds”), or any other financing
mechanism authorized by law. The Authority also reserves the right to use other sources of revenue legally
applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues,
federal or state funds, and investment income.
Section M Estimated Amount of Bonded Indebtedness
The maximum principal amount of bonds (as defined in the TIF Act) secured in whole or part with tax increment from
the TIF District is $2,603,627. The Authority currently plans to finance the improvement costs in the form of a pay-as-
you go revenue note, but reserves the right to issue bonds in any form, including without limitation any interfund loan
with interest not to exceed the maximum permitted under Section 469.178, subd. 7 of the TIF Act.
Section N Original Net Tax Capacity
The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net
tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts certified
between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts
certified between July 1 and December 31, inclusive, this value is based on the current assessment year.
The Estimated Market Value of all property within the TIF District as of January 2, 2016, for taxes payable in 2017, is
$333,000 and the estimated tax capacity is $5,910, which is estimated to be the original net tax capacity of the TIF
District upon establishment and subsequent certification. This also includes an anticipated lot split with partial value
included within the district and reclassification of the property to commercial-industrial.
Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as
a result of:
(1) changes in the tax-exempt status of property;
(2) reductions or enlargements of the geographic area of the TIF District;
(3) changes due to stipulation agreements or abatements; or
(4) changes in property classification rates.
Section O Original Tax Capacity Rate
The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all
local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the
original net tax capacity.
In future years, the amount of tax increment generated by the TIF District will be calculated using the lesser of (a) the
sum of the current local tax rates at that time or (b) the original tax capacity rate of the TIF District.
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 8
The request for certification of the District is expected to occur after June 30, 2016 and prior to July 1, 2017. As a
result, the local tax rates for taxes payable 2017 will be applicable. Since the rates are not available, for purposes of
estimating the tax increment generated by the TIF District, the sum of all local tax rates that apply to property within
the District, for taxes levied in 2015 and payable in 2016 is 127.744%. The County Auditor shall certify the applicable
year’s amount as the original tax capacity rate of the TIF District.
2015/2016
Taxing Jurisdiction Local Tax Rate
City of Lino Lakes 46.019%
Anoka County 38.894%
ISD #12 36.426%
Other 6.405%
Total 127.744%
Section P Projected Retained Captured Net Tax Capacity and
Projected Tax Increment
The Authority anticipates that the project will begin construction in summer/fall 2016 and be 100% completed by
December 31, 2017, creating a total tax capacity for TIF District No. 1-12 of $366,890 as of January 2, 2018. The
captured tax capacity as of that date is estimated to be $225,291 and the first year of tax increment is estimated to be
$287,796 payable in 2019. A complete schedule of estimated tax increment from the TIF District is shown in Exhibit
IV.
The estimates shown in this TIF plan assume that commercial class rates remain at 1.5% of the estimated market
value up to $150,000 and 2.0% of the estimated market value over $150,000, and assume 2% annual increases in
market values.
Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the
extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax
capacity of the TIF District.
The County Auditor shall certify to the Authority the amount of captured net tax capacity each year. The City may
choose to retain any or all of this amount. It is the Authority's intention to retain 100% of the captured net tax capacity
of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District.
Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits
contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the
anticipated life of the TIF District.
Section Q Use of Tax Increment
Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and pay
such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of
financial reporting and auditing of tax increment financing information throughout the state. Exhibit III shows the
projected deduction for this purpose over the anticipated life of the TIF District.
The Authority has determined that it will use 100% of the remaining tax increment generated by the TIF District for
any of the following purposes:
(1) pay for the estimated public costs of the TIF District (see Section K) and County administrative
costs associated with the TIF District (see Section T);
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 9
(2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated
public costs of the TIF District;
(3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to
finance the estimated public costs of the TIF District;
(4) pay all or a portion of the county road costs as may be required by the County Board under M.S.
Section 469.175, Subdivision 1a; or
(5) return excess tax increments to the County Auditor for redistribution to the City, County and School
District.
Tax increments from property located in one county must be expended for the direct and primary benefit of a project
located within that county, unless both county boards involved waive this requirement. Tax increments shall not be
used to circumvent levy limitations applicable to the Authority.
Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a
building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any
other local unit of government or the State or federal government, or for a commons area used as a public park, or a
facility used for social, recreational, or conference purposes. This prohibition does not apply to the construction or
renovation of a parking structure or of a privately owned facility for conference purposes.
If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to
repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject
to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the
cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate
subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the
developer or beneficiary.
Section R Excess Tax Increment
In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated
public costs authorized by the TIF Plan, the Authority shall use the excess tax increments to:
(1) prepay any outstanding tax increment bonds;
(2) discharge the pledge of tax increments thereof;
(3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or
(4) return excess tax increments to the County Auditor for redistribution to the City, County and School
District. The County Auditor must report to the Commissioner of Education the amount of any
excess tax increment redistributed to the School District within 30 days of such redistribution.
Section S Tax Increment Pooling and the Five Year Rule
At least 80% of the tax increments from the TIF District must be expended on activities within the district or to pay for
bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No
more than 20% of the tax increments may be spent on costs outside of the TIF District but within the boundaries of
the Project Area, except to pay debt service on credit enhanced bonds. All administrative expenses are considered to
have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District
if such amounts are:
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 10
(1) actually paid to a third party for activities performed within the TIF District within five years after
certification of the district;
(2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably
expected on the date of issuance to be spent within the later of the five-year period or a reasonable
temporary period or are deposited in a reasonably required reserve or replacement fund.
(3) used to make payments or reimbursements to a third party under binding contracts for activities
performed within the TIF District, which were entered into within five years after certification of the
district; or
(4) used to reimburse a party for payment of eligible costs (including interest) incurred within five years
from certification of the district.
Beginning with the sixth year following certification of the TIF District, at least 80% of the tax increments must be used
to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds
have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District
must be decertified.
The Authority expects that allowable pooling expenditures will be made outside of the TIF District and within the
Project Area (along with allowable administrative expenses), and such expenditures are expressly authorized in this
TIF Plan.
Section T Limitation on Administrative Expenses
Administrative expenses are defined as all costs of the Authority other than:
(1) amounts paid for the purchase of land;
(2) amounts paid for materials and services, including architectural and engineering services directly
connected with the physical development of the real property in the project;
(3) relocation benefits paid to, or services provided for, persons residing or businesses located in the
project;
(4) amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to section 469.178; or
(5) amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clause (1) to (3).
Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or
economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax
increments may be used to pay administrative expenses of the TIF District up to the lesser of (a) 10% of the total tax
increment expenditures authorized by the TIF Plan or (b) 10% of the total tax increments received by the TIF District.
Section U Limitation on Property Not Subject to Improvements - Four Year Rule
If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified
improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall
be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified
improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial
reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of
the fifth year, evidence that the required activity has taken place for each parcel in the TIF District.
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 11
If a parcel is excluded from the TIF District and the Authority or owner of the parcel subsequently commences any of
the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel
shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as
most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the
TIF District.
Section V Estimated Impact on Other Taxing Jurisdictions
Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax
capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The Authority believes that
there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed
development would not have occurred without the establishment of the TIF District and the provision of public
assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the
development therein becomes part of the general tax base.
The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota
Statutes, Section 469.175, Subdivision 2, are listed below.
1. The total amount of tax increment that will be generated over the life of the district is estimated to be
$2,613,034.
2. To the extent the facility in the proposed TIF District generates any public cost impacts on city-provided
services such as police and fire protection, public infrastructure, and borrowing costs attributable to the
district, such costs will be levied upon the taxable net tax capacity of the City, excluding that portion captured
by the District. The City does not anticipate issuing bonds in conjunction with this project.
3. The amount of tax increments over the life of the district that would be attributable to school district levies,
assuming the school district’s share of the total local tax rate for all taxing jurisdictions remained the same, is
estimated to be $745,102.
4. The amount of tax increments over the life of the district that would be attributable to county levies,
assuming the county’s share of the total local tax rate for all taxing jurisdictions remained the same is
estimated to be $795,585.
5. No additional information has been requested by the county or school district that would enable it to
determine additional costs that will accrue to it due to the development proposed for the district.
Section W Prior Planned Improvements
The Authority shall accompany its request for certification to the County Auditor (or notice of district enlargement),
with a listing of all properties within the TIF District for which building permits have been issued during the 18 months
immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the
TIF District by the net tax capacity of each improvement for which a building permit was issued.
There have been no building permits issued in the last 18 months in conjunction with any of the properties within the
TIF District.
Section X Development Agreements
If within a project containing an economic development district, more than 10% of the acreage of the property to be
acquired by the Authority is purchased with tax increment bonds proceeds (to which tax increment from the property
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 12
is pledged), then prior to such acquisition, the Authority must enter into an agreement for the development of the
property. Such agreement must provide recourse for the Authority should the development not be completed.
The Authority anticipates entering into an agreement for development, but does not anticipate acquiring any property
located within the TIF District.
Section Y Assessment Agreements
The Authority may, upon entering into a development agreement, also enter into an assessment agreement with the
developer, which establishes a minimum market value of the land and improvements for each year during the life of
the TIF District.
The assessment agreement shall be presented to the County or City Assessor who shall review the plans and
specifications for the improvements to be constructed, review the market value previously assigned to the land, and
so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate,
shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the
office of the County Recorder of each county where the property is located. Any modification or premature
termination of this agreement must first be approved by the City, County and School District.
The Authority does not anticipate entering into an assessment agreement.
Section Z Modifications of the Tax Increment Financing Plan
Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of
bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the
captured net tax capacity to be retained by the Authority; increase in the total estimated public costs; or designation of
additional property to be acquired by the Authority shall be approved only after satisfying all the necessary
requirements for approval of the original TIF Plan. This paragraph does not apply if:
(1) the only modification is elimination of parcels from the TIF District; and
(2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of
those parcels in the TIF District's original net tax capacity, or the Authority agrees that the TIF
District's original net tax capacity will be reduced by no more than the current net tax capacity of the
parcels eliminated.
The Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of the
TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the
date of certification.
Section AA Administration of the Tax Increment Financing Plan
Upon adoption of the TIF Plan, the Authority shall submit a copy of such plan to the Minnesota Department of
Revenue. The Authority shall also request that the County Auditor certify the original net tax capacity and net tax
capacity rate of the TIF District. To assist the County Auditor in this process, the Authority shall submit copies of the
TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned
improvements. The Authority shall also send the County Assessor any assessment agreement establishing the
minimum market value of land and improvements in the TIF District, and shall request that the County Assessor
review and certify this assessment agreement as reasonable.
The County shall distribute to the Authority the amount of tax increment as it becomes available. The amount of tax
increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of
the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other
Lino Lakes Economic Development Authority, Minnesota
SPRINGSTED Page 13
development, inflation of property values, or changes in property classification rates or formulas. In administering and
implementing the TIF Plan, the following actions should occur on an annual basis:
(1) prior to July 1, the Authority shall notify the County Assessor of any new development that has
occurred in the TIF District during the past year to insure that the new value will be recorded in a
timely manner.
(2) if the County Auditor receives the request for certification of a new TIF District, or for modification of
an existing TIF District, before July 1, the request shall be recognized in determining local tax rates
for the current and subsequent levy years. Requests received on or after July 1 shall be used to
determine local tax rates in subsequent years.
(3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF
District. The amount certified shall reflect any changes that occur as a result of the following:
(a) the value of property that changes from tax-exempt to taxable shall be added to the
original net tax capacity of the TIF District. The reverse shall also apply;
(b) the original net tax capacity may be modified by any approved enlargement or reduction of
the TIF District;
(c) if laws governing the classification of real property cause changes to the percentage of
estimated market value to be applied for property tax purposes, then the resulting increase
or decrease in net tax capacity shall be applied proportionately to the original net tax
capacity and the retained captured net tax capacity of the TIF District.
The County Auditor shall notify the Authority of all changes made to the original net tax capacity of the TIF District.
Section AB Filing TIF Plan, Financial Reporting and Disclosure Requirements
The Authority will file the TIF Plan, and any subsequent amendments thereto, with the Commissioner of Revenue and
the Office of the State Auditor pursuant to Minnesota Statutes, Section 469.175, subdivision 4A. The Authority will
comply with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175, subdivisions 5
and 6.
Exhibit I
SPRINGSTED Page 14
Map of Tax Increment Financing (Economic Development) District No. 1-12
Exhibit I
SPRINGSTED Page 15
Map of Tax Increment Financing (Economic Development) District No. 1-12
Within Development District No. 1
Exhibit II
SPRINGSTED Page 16
Assumptions Report
City of Lino Lakes, Minnesota
Tax Increment Financing (Economic Development) District No. 1-12
Clearwater Creek Business Park Project
Draft TIF Plan Exhibits: Based on EMV of $18.2M - Construct 2016-2017
Type of Tax Increment Financing District Economic Development
Maximum Duration of TIF District 8 years from 1st increment
Projected Certification Request Date 06/30/16
Decertification Date 12/31/26 (9 Years of Increment)
2015/2016
Base Estimated Market Value * $333,000
PID: 24-31-22-34-0001
PID: 24-31-22-34-0002
PID: 24-31-22-31-0001
Original Net Tax Capacity $5,910
Assessment/Collection Year
2016/2017 2017/2018 2018/2019 2019/2020
Base Estimated Market Value $333,000 $333,000 $333,000 $333,000
Increase in Estimated Market Value 0 8,767,000 18,049,000 18,416,640
Total Estimated Market Value 333,000 9,100,000 18,382,000 18,749,640
Total Net Tax Capacity $5,910 $181,250 $366,890 $374,243
City of Lino Lakes 46.019%
Anoka County 38.894%
ISD # 12 36.426%
Other 6.405%
Local Tax Capacity Rate 127.744% Payable 2016
Frozen Tax Capacity Rate
Fiscal Disparities Contribution From TIF District 37.5890%
Administrative Retainage Percent (maximum = 10%) 5.00%
Pooling Percent 15.00%
Bonds Loan/Note
Bonds Dated NA Note Dated 02/01/17
Bond Issue @ 0.00% (NIC) NA Note Rate 4.00%
Eligible Project Costs NA Note Amount $1,695,909
Present Value Date & Rate 02/01/17 4.00% Net PV Amoun 1,695,909
Notes
* Base EMV 2017 market values for 3 parcels. Tax capacity calculated at straight 2% class rate.
Assume property will be classified as commercial/industrial upon project completion.
Projections assume no future changes to class rates or tax rates,
and include 2% annual market value inflator.
Development includes construction of in 2016/17.
Valuation estimates provided by County and include improved land value of $1.2M.
Fiscal disparities contribution from properties within the proposed TIF District.
Exhibit III SPRINGSTED Page 17 Projected Tax Increment Report City of Lino Lakes, MinnesotaTax Increment Financing (Economic Development) District No. 1-12Clearwater Creek Business Park ProjectDraft TIF Plan Exhibits: Based on EMV of $18.2M - Construct 2016-2017Less: Less: Retained Times: Less: Annual Less: Less:Annual Total Total Original Fiscal Captured Tax Annual State Aud. Revenue Admin. Pooling AnnualPeriod Market Net Tax Net Tax Disp. @ Net Tax Capacity Gross Tax Deduction Net of Retainage Retainage NetEnding Value * Capacity Capacity ** 37.5890% Capacity Rate *** Increment 0.360% OSA Deduction 5.00% 15.00% Revenue(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)12/31/16 333,000 5,910 5,910 0 0 127.744% 0 0 0 0 0 012/31/17 333,000 5,910 5,910 0 0 127.744% 0 0 0 0 0 012/31/18 9,100,000 181,250 5,910 65,909 109,431 127.744% 139,792 503 139,289 6,964 20,893 111,43212/31/19 18,382,000 366,890 5,910 135,689 225,291 127.744% 287,796 1,036 286,760 14,338 43,014 229,40812/31/20 18,749,640 374,243 5,910 138,453 229,880 127.744% 293,658 1,057 292,601 14,630 43,890 234,08112/31/21 19,124,633 381,743 5,910 141,272 234,561 127.744% 299,637 1,079 298,558 14,928 44,784 238,84612/31/22 19,507,125 389,393 5,910 144,147 239,336 127.744% 305,737 1,101 304,636 15,232 45,695 243,70912/31/23 19,897,268 397,195 5,910 147,080 244,205 127.744% 311,958 1,123 310,835 15,542 46,625 248,66812/31/24 20,295,213 405,154 5,910 150,072 249,172 127.744% 318,303 1,146 317,157 15,858 47,574 253,72512/31/25 20,701,118 413,272 5,910 153,123 254,239 127.744% 324,776 1,169 323,607 16,180 48,541 258,88612/31/26 21,115,140 421,553 5,910 156,236 259,407 127.744% 331,377 1,193 330,184 16,509 49,528 264,147$2,613,034 $9,407 $2,603,627 $130,181 $390,544 $2,082,902* Total Market Value based on new estimated land and building value of $18,200,000 (preliminary and subject to change)** Original net tax capacity based on existing taxable land value of five properties and calculated based on reclassification to commercial-industrial class rates*** Total Combined Local Tax Capacity Rate of City, County, School District and other taxing jurisdictions for payable 2016
Exhibit IV SPRINGSTED Page 18 Estimated Impact on Other Taxing Jurisdictions ReportCity of Lino Lakes, MinnesotaTax Increment Financing (Economic Development) District No. 1-12Clearwater Creek Business Park ProjectDraft TIF Plan Exhibits: Based on EMV of $18.2M - Construct 2016-2017WithoutProject or TIF District With Project and TIF DistrictProjected Hypothetical2015/2016 2015/2016 Retained New Hypothetical Hypothetical Tax GeneratedTaxable 2015/2016 Taxable Captured Taxable Adjusted Decrease In by RetainedTaxing Net Tax Local Net Tax Net Tax Net Tax Local Local CapturedJurisdiction Capacity (1) Tax Rate Capacity (1) + Capacity = Capacity Tax Rate (*) Tax Rate (*) N.T.C. (*)City of Lino Lakes 17,063,470 46.019% 17,063,470 $259,407 17,322,877 45.330% 0.689% 117,589Anoka County 265,016,460 38.894% 265,016,460 259,407 265,275,867 38.856% 0.038% 100,795ISD # 12 25,985,579 36.426% 25,985,579 259,407 26,244,986 36.066% 0.360% 93,558 Other (2) --- 6.405% --- 259,407 --- 6.405% --- --- Totals 127.744% 126.657% 1.087% * Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each ofthe taxing jurisdictions above, the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above)which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax ratewould decrease by 1.087% (see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that theRetained Captured Net Tax Capacity of the TIF District would generate is also shown above.Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions,then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity = total net tax capacity - captured TIF - fiscal disparity contribution, if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 5.01% of the total tax rate.
Exhibit V
SPRINGSTED Page 19
Market Value Analysis Report
City of Lino Lakes, Minnesota
Tax Increment Financing (Economic Development) District No. 1-12
Clearwater Creek Business Park Project
Draft TIF Plan Exhibits: Based on EMV of $18.2M - Construct 2016-2017
Assumptions
Present Value Date 06/30/16
P.V. Rate - Gross T.I. 4.00%
Increase in EMV With TIF District $20,782,140
Less: P.V of Gross Tax Increment 2,025,557
Subtotal $18,756,583
Less: Increase in EMV Without TIF 0
Difference $18,756,583
Annual Present
Gross Tax Value @
Year Increment 4.00%
1 2018 139,792 127,971
2 2019 287,797 253,327
3 2020 293,659 248,545
4 2021 299,638 243,851
5 2022 305,738 239,246
6 2023 311,959 234,725
7 2024 318,304 230,287
8 2025 324,777 225,933
9 2026 331,378 221,659
$2,613,066 $2,025,557
WS – Item 3
WORK SESSION STAFF REPORT
Work Session Item No. 3
Date: July 5, 2016
To: City Council
From: Rick DeGardner
Re: Replacement of Two City Hall Air Conditioning Units
Background
During the June 27th work session, staff informed the City Council that two air
conditioning units were failing and needed to be replaced or repaired. The Council
indicated they needed more time evaluate the options and directed staff to place this item
on the July 5th work session agenda.
Requested Council Direction
Staff recommends replacing two AC systems at an estimated cost of $110,000.
Attachments
Letters from NAC Mechanical & Electrical Services
WS – Item 4
WORK SESSION STAFF REPORT
Work Session Item No. 4
Date: July 5, 2016
To: City Council
From: Jeff Karlson
Re: Agrihoods
Background
During the June 13 Council meeting, Councilmember Maher requested that discussion
about Agrihoods be placed on the next work session agenda. Two articles are attached
that explain this new housing trend.
Staff has done some research on how developers are incorporating agricultural acreage
within new housing units, essentially creating community-supported agricultural
programs right in the subdivision.
Requested Council Direction
This is for discussion only.
Attachments
Two articles
WS – Item 5
WORK SESSION STAFF REPORT
Work Session Item No. 5
Date: July 5, 2016
To: City Council
From: Jeff Karlson
Re: Office Specialist Position
Background
The Administrative Assistant in Community Development, Nicole DeDeyn, will be on a
12-week maternity leave at the end of the month, which will leave a huge gap in our
support staff over the summer. This is particularly an inopportune time with elections
coming up.
I am proposing that Office Specialist Mary Fogarty be reinstated to full-time hours
beginning August 1st. Due to budget cuts in the 2016 budget, Mary’s position was
reduced to a half-time position at the beginning of the year. Ms. DeDeyn has less than 40
hours of banked leave, so there would be no additional cost to the City. Ms. Fogarty
currently receives unemployment benefits for her lost wages and waives health insurance
coverage.
I also want to point out that given the increased workload in utility billing, staff is also
proposing that Mary continue to work full-time after Nicole returns, with one-half of her
hours being charged to the sewer and water funds.
Requested Council Direction
Approve the reinstatement of Mary Fogarty to full-time hours.
Attachments
None
Item #7
Monthly Progress Report
July 5, 2016
Item Last Action Taken Staff Status
Digital Scanning Project 3/14/16 – Council approved transfer of
$15,000 from Contingency Fund for
scanning and indexing building plans
Julie Large format scanning is in
progress
White Bear Lake Restoration
Assn. v. Dept. of Natural
Resources (DNR)
The WBL Restoration Assn. & WBL
Homeowners’ Assn. reached a settlement
agreement with the DNR that imposes a
three-year stay on the lawsuit so funds
can be appropriated for a Northeast Metro
Project. This involves a construction
project to connect Northeast cities to the
St. Paul Regional Water Service. Lino
Lakes is one of seven cities included in
the second phase of the project.
Jeff The DNR developed cost
estimates for augmenting
White Bear Lake with surface
water. Legislators and
augmentation proponents
questioned the construction
cost estimate, which the DNR
revised to $38.4 million. The
total cost range is $36.5 to
$78.2 million.
Legion Parking Lot 3/7/16 – Staff was directed to obtain
an appraisal for City property
Mike Legion wishes to purchase
property, but must submit a
design to the bank before
securing a loan
Location of Veteran’s
Memorial
6/6/16 – Council was directed to visit
potential sites for veteran’s memorial
The Council agreed that the
memorial could be built in
conjunction with a new
“Veteran’s Memorial Park”
south of the new fire
station.
Union History Report 5/4/15 – Council requested staff to put
together a union history report to
educate future councils
Jeff Report is going through
final revisions.