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HomeMy WebLinkAbout12-10-2012 EDA PacketAGENDA ECONOMIC DEVELOPMENT AUTHORITY MONDAY, DECEMBER 10, 2012 City Council Chambers 6:15 P.M. 1. Call to Order and Roll Call 2. Consideration of Minutes of January 9, 2012 3. Consideration of Resolution No. 12-01 Approving an Amendment to the Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 4. Adjourn EDA MINUTES January 9, 2012 DRAFT DATE TIME STARTED TIME ENDED MEMBERS PRESENT MEMBERS ABSENT OTHERS PRESENT: : January 9, 2012 . 7:25 p.m. . 7:29 p.m. : Commissioners O'Donnell, Roeser, Reinert, Rafferty, Stoesz None : Mary Divine, Mike Grochala The meeting was called to order at 7:25 p.m. by President Rafferty. CONSIDERATION OF THE MINUTES OF AUGUST 22, 2011 EDA Member Reinert moved to approve the August 22, 2011 minutes. EDA Member Roeser seconded the motion. Motion carried. CONSIDERATION OF ANNUAL APPOINTMENTS Mary Divine, Economic Development Coordinator, informed the members that each year the EDA is required to hold an annual meeting and make a number of appointments; the list was before the authority for consideration. She noted that at a previous council work session, members discussed appointing EDA member Rafferty to another term as president, EDA member Roeser as vice president, and EDA member O'Donnell as Treasurer. EDA member Reinert moved the appointments as discussed. EDA member Stoesz seconded the motion. Motion carried unanimously. EDA member O'Donnell moved to approve other appointments as outlined in the staff report, with the addition of F&M bank to the list of legal depositories. EDA Member Roeser seconded the motion. Motion carried unanimously. Ms. Divine handed out a summary of 2011 EDA activity and economic development initiatives that were carried out in 2011 for EDA members' review. ADJOURNMENT There being no further business, EDA Member Reinert moved to adjourn. EDA Member O'Donnell seconded the motion. Motion carried unanimously. Meeting adjourned at 7:29 p.m. 1 AGENDA ITEM 3 STAFF ORIGINATOR: Mary Alice Divine DATE: December 10, 2012 TOPIC: Consideration of Resolution No. 12-01 Approving Amendment of Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 VOTE REQUIRED: 3/5 BACKGROUND: The Economic Development Authority created TIF District No. 1-5 in 1992. The establishment of this Housing District was intended to provide a source of revenue for development of the Cottages of Willow Ponds affordable senior housing project. In January of 2012 the final payment was made to the Senior Cottages. The authorized budget of the district is $915,000 and after meeting all obligations it is estimated that there will be a fund balance of $100,000 by the end of this year. Assuming the collection of similar tax increment into the future of the District, approximately $330,000 would be available over the next five years before the budgetary limit is met. The City has the ability to "pool" tax increment from housing districts for the purpose of providing affordable housing within the City. The City has been working on development opportunities within Legacy at Woods Edge, and exploring additional revenue sources that could be available to assist with future projects that meet the goals of the City and not create any negative fiscal impacts. Staff is recommending the EDA consider the approval of the administrative amendment to TIF Plan for TIF District No. 1-5. ATTACHMENTS 1. Resolution No. 12-01 Amending the TIF Plan for TIF District No. 1-5 2. Amended TIF Plan for TIF District No. 1-5 LINO LAKES ECNOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 12-01 RESOLUTION APPROVING MODIFICATION OF TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-5 WHEREAS, by a resolution approved December 28, 1992 the Lino Lakes Economic Development Authority (the "Authority") approved the Tax Increment Financing Plan (the "Plan") for Tax Increment Financing (Housing) District No. 1-5 (the "TIF District"), pursuant to and in conformity with Minnesota Statutes, Sections 469.090 through 469.1081 (the "EDA Act") and Sections 469.174 to 469.179 (the "TIF Act"); and WHEREAS, by a resolution approved December 28, 1992, the City Council of the City of Lino Lakes (the "City"), after a duly notice public hearing, approved the Plan for the TIF District; and WHEREAS, the TIF District is located within Development District No. 1 (the "Project Area"), which is a development district established under Minnesota Statutes, Sections 469.124 to 469.133; and WHEREAS, the City and Authority have determined a need to modify the budget of tax increment expenditures in the Plan; and WHEREAS, under Section 469.175, subd. 4 of the TIF Act, the Authority may modify the Plan for the TIF District without the notice and hearings required for a new district, if the changes are not those described in Section 469.175, subdivision 4(b), clauses (1) through (6); and WHEREAS, the proposed modifications to the TIF Plan include revised line items of expenditures to finance additional afford housing in the Project Area, but do not increase the total estimated cost of the project or the total amount of bonded indebtedness. NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Lino Lakes Economic Development Authority as follows: 1. The administrative modification to the Plan is hereby approved in substantially the form on file in City Hall. 2. Upon approval of the modification to the Plan by the City Council of the City, the Community Development Director is authorized to forward a copy of the modified Plan to the Department of Revenue and the State Auditor pursuant to Minnesota Statutes 469.175, subd.4a. 414975v1 SJB LN140-80 3. The City Clerk is authorized and directed to forward a copy of the Plan to Anoka County for information purposes. DATED: December 9, 2012 President ATTEST: Secretary 2 414975v1 SJB LN140-80 Economic Development Authority of the City of Lino Lakes Modification No. 1 to Tax Increment Financing Plan for Tax Increment Financing (Housing) District No. 1-5 Dated: December 28,1992 Administrative Amendment Dated: November 29, 2012 (DRAFT) Prepared by: SPRINGSTED INCORPORATED 380 Jackson Street, Suite 300 St. Paul, MN 55101-2887 (651) 223-3000 WWW.SPRINGSTED.COM INTRODUCTION The Authority, on December 28, 1992 created Tax Increment Financing District No. 1-5, within Development District No. 1 (Project Area), and adopted a Tax Increment Financing Plan (the "Plan") in connection therewith. The boundaries of Tax Increment Financing District No. 1-5 are not being modified due to this amendment. The Authority intends to administratively amend the Plan for Tax Increment Financing District No. 1-5 on December 10, 2012 (this amendment) to provide for the financing of certain eligible housing project costs within the Project Area and City of Lino Lakes. Specifically the Authority intends to use available tax increments from the Tax Increment Financing District No. 1-5 for financing of eligible affordable housing project within the development area generally known as "Legacy at Woods Edge", including property within existing Tax Increment Financing District No. 1-11 (Legacy at Woods Edge), and property adjacent to the TIF District. The purpose of the administrative amendment to the Plan is to adjust the existing authorized tax increment revenues and public costs to authorize for `pooling' of increment to pay for eligible housing project costs related to new anticipated development in the Legacy at Woods Edge area. This amendment does not make any of the changes specified in Minnesota Statutes, Section 469.175, subd. 4, clauses (1) to (6), and therefore may be approved without the hearings and notices required for approval of the initial Plan. The sections of the Plan for Tax Increment Financing District No. 1-5 specifically being modified include Subsection I: Modification of TIF Plan; Subsection J: Use of Tax Increment; Subsection R: Estimate of Project Costs; Subsection S: Estimate of Bonded Indebtedness and Subsection W: Estimate of Impact on Other Taxing Jurisdictions. TABLE OF CONTENTS Tax Increment Financing Plan for Tax Increment Financing District No. 1-5 Subsection I. Modification of TIF Plan 1 J. Use of Tax Increment 1 R. Estimate of Project Costs 1 S. Estimate of Bonded Indebtedness 2 W. Estimate of Impact on Other Taxing Jurisdictions 2 Map of the Tax Increment Financing District EXHIBIT I Map of the Development District EXHIBIT I Economic Development Authority of the City of Lino Lakes, Minnesota Subsection I Modification of TIF Plan The Plan for the TIF District No. 1-5 may be modified by the Authority, provided that any enlargement of geographic area of the TIF district, increase in amount of bonded indebtedness to be incurred, including a determination to capitalize interest on the debt if that determination was not a part of the original Plan, or to increase or decrease the amount of interest on the debt to be capitalized, increase in the portion of the captured tax capacity to be retained by the Authority, increase in total estimated tax increment expenditures or designation of additional property to be acquired by the Authority shall be approved upon the notice and after such discussion, public hearing and findings as required for approval of the original Plan. The Authority is proposing an administrative amendment to the TIF Plan to which there will not be any of the prior listed activities that would cause the need for notice and public hearing as required for approval of the original Plan. As included in Subsection R below, the Authority intends to adjust specific project costs of the original Plan budget to authorize for the spending of available tax increments on eligible 'pooling' activities of the Project Area. Specifically, the Authority intends to use available tax increments for the construction of affordable housing within the Project Area and Authority project referenced as Legacy at Woods Edge. Subsection J. Use of Tax Increment Pursuant to Section 469.176, Subd. 4 of the TIF Act, all revenues derived from TIF District No. 1-5 will be used in accordance with the Plan. The revenues will be used to finance or otherwise pay the capital and administrative costs of development activities within Development District No. 1 as identified in the Program and the Plan for TIF District No. 1-5. The Authority will comply with the limitations on the use of increment within Development District No. 1 but outside of TIF No. 1-5 required by Section 469.1763 of the TIF Act. Under Modification No. 1 to this Plan, the City is authorizing expenditure of tax increments outside the TIF District to finance additional affordable housing projects, which expenditures are deemed to be activities within the TIF District under Section 469.1763, subd. 2 of the TIF Act. Subsection R Estimate of 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. Original Approved Budget (December 28, 1992) Administrative Amendment December 10, 2012 Site Excavation and preparation 160,000 Utilities/Assessments 200,000 130,900 Streets 125,000 81,950 Landscaping 200,000 Land Acquisition 155,000 101,750 Site Improvements 235,950 Subtotal 840,000 550,550 Administrative 75,000 30,450 Other Public Improvements 0 Construction of Affordable Housing 334,000 Total 915,000 915,000 SPRINGSTED Page 1 Economic Development Authority of the City of Lino Lakes, Minnesota The Authority 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. Original TIF (August 11, 2003) Modification No. 1 July 18, 2011 (DRAFT) Tax increment revenue 915,000 900,000 Interest on invested funds 0 15,000 Other 0 0 Total 915,000 915,000 The Authority initially provided financial assistance to the proposed development within the TIF District through issuance of a pay-as-you-go note in the principal amount of $840,000, without interest. As tax increments were collected from the TIF District, a portion of these taxes were distributed to the developer/owner as reimbursement for public costs incurred. However, the amount paid under the prior note was approximately $550,000 (due to reduction in tax increment revenues because of several factors, including property tax reform). Under this Plan as amended, the Authority estimates additional costs in the amount of $334,000 (see chart above) to finance construction of affordable housing in the Legacy at Woods Edge area, which meets the requirements of Minnesota Statutes, Section 469.1761. Such additional costs represent amounts qualifying under Minnesota Statutes, Section 469.1763, subdivision 2(b) and 4. Subsection S Estimate of Bonded Indebtedness It is not anticipated that TIF Bonds will be sold with regard to TIF District No. 1-5 but the Authority expects to enter into a development agreement with the developer which will contain a revenue obligation in an amount necessary to reimburse the developer for the above costs. As noted in Section R, above, the City may finance additional affordable housing project costs through any obligations permitted under law, provided that any additional bonds or note will not exceed $290,000, such that the total estimated bonded indebtedness from the TIF District does not exceed the original authorized bonded indebtedness of $840,000. Subsection W Estimate of Impact on Other Taxing Jurisdictions The City does not anticipate that modification of the TIF Plan will change the fiscal impacts of the TIF District on other taxing jurisdictions, other than to retain the TIF District for its maximum duration. The original TIF Note was fully paid earlier in 2012, and the City has determined to continue to collect tax increment in order to stimulate development of additional affordable housing. Such additional housing will not be within the TIF District, and as such will not create additional fiscal impacts (other than positive impacts in the form of additional tax base not captured as tax increment). SPRINGSTED Page 2 Exhibit I 444-00,§4242„,--ro ;Ipb4dlou Ilitigeol* 11211 Ettlia nuotimairoinie lanam augaileiMMMOUOMUNIFf IriI Lilac: Development. District No. I outlined in Heavy Dark, Line Tax Increment Knotting astrict No. 1,-.5 Noted by. Slash Marks. SPRINGSTED Page 3- Exhibit I Development District No. 1 City of Uno Lakes Anoka County, Minnesota SPRINGSTED Page 4