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HomeMy WebLinkAboutResolution 6594B CITY OF MOUNDS VIEW COUNTY OF RAMSEY ST A TE OF :VIIl\"l\" ESOT A RESOLl:TION NO. 6594H RESOLIJTIO~ ADOPTING A MODIFICATIOl\" TO THE PROJECT PLA~ FOR THE MOLNDS VIEW ECO~OMIC DEVELOP:VIEl\"T PROJECT; AND ESTABLISHING TAX INCREME:"!T FINANCING DISTRICT NO.5 THEREI:"! ANn ADOPTING A TAX INCREMENT FINANCING PI.A:"! THEREFOR. BE IT RESOLVED by the City Council (thc "Council") of the City of Mounds View, Minnesota (the "City"), as follows: Section 1. Recitals . 1.01. The Board of Commissioners (the" Board") of the Mounds Vic\v Economic Development Authority (the "EDA") has hcretofore established the Mounds View Economic Development Project and adopted the Project Plan therefor. It has been proposed by the EDA and the City that the City adopt a Modification to the Project Plan for the Mounds View Economic Development Project (the "Project Plan Modification") and establish Tax Increment Financing District No.5 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") thcrefor (the Project Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law. including Minnesota Statutes, Scctions 469.090 to 469.1082 and Sections 469.174 to 469.1799, all inclusive, as amended, (the "Act") all as retlected in the Plans, and presented for thc Council's consideration. 1.02. The EDA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The EDA and City have performed all actions requircd by Imv to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including. but not limited to, notification of Ramsey County and Independent School District No. 621 having taxing jurisdiction over the property to be included in the District a review of the Plans by the City Planning Commission and Council, approval of the Plans by the EDA on August 22, 2005. and the holding of a publie hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and to the actIvIties contemplated therein have herctofore been prepared by stafr and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The RepOlts include data, infclnnation and/or substantiation constituting or relating to the basis for the other findings and determinations madc in this resolution. The Council hereby confirms, ratifics and adopts the Reports, which are hereby incorporated into and madc as fully a part of this resolution to the same extent as if set forth in full hercin. 1.05. The EDA and City have reviewcd the TIF Plan for the proposcd Tax Incrcmcnt Financing District No. 5 and support the following parcels. adjacent rights-of--way. and abutting roadways be included in the proposed district: . 05-30-23-13-0001 05-30-23-21-0005 . . 05-30-23-21-0006 05-30-23-24-0059 05-30-23-24-0060 1.06 Project. The City is not modifying the boundaries of the Mounds Vicw Economic Dcvelopmcnt Scction 2. Findings for the Adoption and Approval of the Plans 2.01. The Council hcreby finds that the Plans, are intended and. in thc judgment or this Council, the errect of such actions will be, to provide an impetus 1'01' development in the public intercst and accomplish certain objectivcs as specilicd in the Plans, which are hereby incorporatcd herein. Section 3. Findings flJr the Establishment of Tax Increment Financinl! District No.5 3.01. The Council hereby finds that the District is in the public intcrcst and is an "economil: development district" established undcr thc 2005 Laws of Minnesota, Chapter 152, Article 2, Section 26 (II.F No. 2498) (the "Special Legislation"), located in the Mounds View Economic Developmcnt Project. 3.02. The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably taresceable futurc and that thc increased market value of the site that could reasonably be expectcd to occur without the use of tax incremcnt financing would be less than the increase in thc market value estimatcd to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration or thc District pCl111itted by the Tax Increment Financing Plan, that thc Plans conform to the general plan tar thc developmcnt or redevelopment of the City as a whole; and that thc Plans will aflard maximum opportunity consistent with the sound needs or the City as a whole, for the dcvelopment or redevelopment of the District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set tarth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 3.04. Pursuant to the Special Legislation, Subd. 2(t), the limitation on the ability to elect the method of computation under M.S., Section 469.177, Subd. 3, lar an economic development district does not apply and the EDA or City may elect the method of computation under paragraph (a) or (b) of section M.S., Section 469.177, Subd. 3. The EDA will choose to calculate fiscal disparities by clause b (inside the District). Section 4. Public Purpose 4.01. The adoption of the Plans con larms in all respects to the requirements of the Act and will help discourage commerce, industry, or manufacturing rrom moving their operations to another state, municipality or country, will result in increased employment in the state, and will result in preservation and enhancement ofthe tax base of the State and thereby serves a public purpose. Section 5. Approval and Adoption of the Plans 5.01. The Plans, as presented to thc Council on this date, including without limitation the findings and statements of objectives containcd therein, arc hereby approved, ratified, established, and adopted and shall be placed on file in the oflice ofthe City Administt'ator. . . 5.02. The staff or the City. the City's advisors and legal counsel are authorized and directed to roceed with the implementation or the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Ramsey County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the EDA is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for \vhich bui [ding permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City Administrator is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. Dated: August 22, 2005 'j~ vV-I!k Rob arty, Mayor ~ ATTEST: ;i~-C, Ll (l Kurt Ulrich, City Administrator (Seal) . . EXHIBIT A RESOLUTION NO. 6594B The reasons and facts supporting the findings l'or the adoption of the Tax Increment Financing Plan (TIF Plan) tar Tax Increment Financing District No. 5 (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: I. Finding that the District is an economic developme1/t district as de.lined in AI.S, Section 469.174, Subd. 1]. The District is a contiguous geographic area within the City's Mounds View Economic Development Project, delineated in the TIF Plan, far the purpose of financing economic development in the City through the use of tax increment. The District is in the public interest because it will facilitate developmcnt of an approximate 820,000 sq. n. business campus l'or Medtronic which will discourage commerce, industry. or manufacturing ti'om 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. .., Finding that the proposed development, in the opinion of the 0(\' ('ouncil, lI'ould not rt!aso1/ahly be e.\pected to occur sole~v through private investment lvithin the reasonah~v foreseeahle fitture and that the increased market nllue qj" the site that could reasonah~1" be expected to occur without the ust! of tax increment financing would be less than the increase in the market value estimated to result jl-om the proposed development ajier subtracting the present value of the projected tax incremellfs for the 1//(/ximum duration qj"the District permitted by the TlF Plan. The proposed development, in the opinion of the 0(1', would not reasonab~l' be expected to occur sole~v through private investment ll'ithin the reasonab~v foreseeable fiJture. Several issues are impediments to private development of the site including lack of access, existing wetlands and inadequate roadway and infrastructure. The transportation improvements that have to be constructed alone l'or this development (or any other type of development constructed here) total over $20 million. Because Medtronie is viewed as a major asset to Minnesota's biotech initiatives and large employer within the State, the additional roadway funding that was approved for this project would never have been available to this site, thus not making any other type of development (housing or commercial) financially feasible. In addition, site constraints require the developer to acquire adjacent land to preserve existing wetlands and green space which adds additional costs. Based upon analysis of the developer's proforma the City has determined that a gap needs to be filled through tax increment in order to make the proposed development financially feasible. The City therefore does not believe the proposed corporate office facility is likely to occur without the assistance described in this TIF Plan. (See Appendix F orTIF Plan.) l1/e increased market value 0/ the site that could reasonably he expected to occur lvithout the use of tax in cremeJlf .Iinancing would be less than the increase in market mlue estimated to result .Ii.om the proposed development after suhtracting the present value (~( the projected tax increments for the maximum duration 0/ the District permitted by the TlF Plan: While the property could be sold to another developer for some other use, these scenarios are not feasible in the market due to various constraints mentioned above along with others. First, industrial uses could not meet the market valuation due to the fact that they arc single story in nature (can't get to the same density as office), lack the amenities in design and construction and are traditionally valued at \IS the market value of commercial and office uses. Second, cOlllmercial retail uses have the same restraint in that the market does not allow for ve11ical commereiallrctail development. Although retail can on occasion have a higher per sq/ft value, the lack of the ability to develop vertically limits the overall value developed on the site. Third, the office market is still soft in the metropolitan area and the ability to develop this entire site for ortice use is unlikely as it is unlikely that the oflice sites . . developed would be of similar square footage. Fourth the site could be developed for housing or mixed use, but the site would need to be built at nearly 100 percent high density in order to create the same value, which is unlikely from a City policy perspective. An analysis of the development proforma based upon this information and research and the proposed development costs provided by the developer has been completcd. It \vas detennined that a gap existed to make the project financially not feasible for the developer. Even if the devcloper received the land for free, there would still be a gap in the traditional sense. Given that the City had an appraisal completed that showed a value of nearly S 1 0 million for the land. it is unlikely that the land cost will be lowered in the near future for this proposed development or another type of development. Thcrefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is SO. b. If the proposed development occurs, the total increase in market value will be $65,600,000 (See Appendix r ofTlF Plan). c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIP Plan is estimated to be S15,708,780 (See Appendix F ofTIF Plan). d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $49,891,220 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the District cOi!lorll/s to the general plan for the del'eloplI/ent or redeveloplI/ent a/the Inunicipali(v as a lvllOle. The Council finds that thc TIF Plan conforms to the general development plan of the City as a whole based upon the following: The conclusion and recommendation of City staff is that the TIP Plan is consistent with the City's comprehensive plan based upon the following information and City actions. The development contemplated for the District consists of an approximately 820,000 square foot office campus for Medtronic. On January 10, 2005, both the City and EDA authorized work associated with the preparation of a comprehensive plan amendment for the development site in the District. On February 2, 2005, the Planning Commission for the City approved a recommendation to the City Council as to the approval of a comprehensive plan amendment revising the land use designation for the development site in the District from Outdoor Sport Recreation (SRO) and Passive Open Space (OSP) to Office (OFC). On May 9, 2005, the City Council established the date of May 23, 2005 for a public hearing to consider approval of the comprehensive land use amendment for the development site in the District (the public hearing was held on May 23, 2005, but adoption of the amendment was deferred to a latcr datc). On July 11, 2005, the City Council approved the amendment to the City's comprehensive plan amending the designated land use for the development site in the District from SRO and OSP to OFC. In conjunction with the comprehensive plan amendment referenced herein, the City also worked on and approved the final draft of the Bridges Office Development Alternative Urban Areawide Review (AUAR) document on July 11. 2005, of which the comprehensive plan amendment discussed herein Vias a required component. On July 20, 2005, the Planning Commission confirmed that the proposed sale of the development site in the District to Medtronic was consistent with the City's comprehensive plan. On August 3, 2005, the Planning Commission did not approve a resolution finding that the TIF Plan for the District conformed to the general plan for the . . development and redevelopment of the City as a whole. However, consistent with the previous actions of both the Planning Commission and City Council as to the comprehensive plan amendment referenced herein, the adoption of the AUAR referenced herein, and the conclusions and recommendations of City staff, the Council finds that the TIF Plan and the office development contemplated therein conforms to the general development plan for the City as a whole as the desib'llated land use for the development site within the District is now properly that of Office (OrC), which is consistent with the office complex development proposed to be constructed by Medtronic at the development site within the District. 4. Finding that the TlF Plan for the District will ({[ford maximlfln opportuni(,", consistent lFith the sOl/nd needs of the City as a whole, for the development of the lvfol/Ilds VieH' Economic Development Project by private ente/prise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, increased tax base of the State. and add a high quality development to the City.