Loading...
HomeMy WebLinkAbout01-08-2007 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA MOUNDS VIEW CITY HALL Monday, January 8, 2007 6:30 PM 1. CALL TO ORDER 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Flaherty, Commissioner Hull, Commissioner Mueller 3. APPROVAL OF AGENDA 4. PUBLIC INPUT: Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. 5. APPROVAL OF MINUTES A. EDA Minutes, December 11, 2006. 6. CONSENT AGENDA 7. EDA BUSINESS A. Consideration of EDA Resolution 07-EDA-227, reappointing Torri Johnson, Jason Helgemoe, and Gary Meehlhause to the Mounds View Economic Development Commission. B. Review the Mounds View Economic Development Authority’s Tax Increment Financing (TIF) Policy and Application and consider changes. 8. REPORTS 9. NEXT EDA MEETING: Monday, January 22, 2007 @630pm 10. ADJOURNMENT Minutes were reviewed by Jim Ericson. Due to the holidays, Staff was not able to get these minutes in time to the Council for their review. PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 December 11, 2006 6 Mounds View City Hall 7 2401 Highway 10, Mounds View, MN 55112 8 6:00 P.M. 9 10 11 1. CALL MEETING TO ORDER 12 13 2. ROLL CALL: President Marty, Vice President Stigney, Commissioner Gunn, 14 Commissioner Flaherty, and Commissioner Thomas. 15 16 NOT PRESENT: None. 17 18 3. APPROVAL OF AGENDA 19 20 MOTION/SECOND: Gunn/Flaherty. To Approve the December 11, 2006 Agenda as presented. 21 22 Ayes – 5 Nays – 0 Motion carried. 23 24 4. PUBLIC INPUT 25 26 None. 27 28 5. APPROVAL OF MINUTES 29 30 A. November 13, 2006 EDA Minutes 31 32 MOTION/SECOND: Thomas/Stigney. To Approve the November 13, 2006 EDA Minutes as 33 Presented. 34 35 Ayes – 5 Nays – 0 Motion carried. 36 37 6. CONSENT AGENDA 38 39 None. 40 41 7. EDA BUSINESS 42 43 Mounds View EDA December 11, 2006 Regular Meeting Page 2 A. Review and Discuss Premium Stop Redevelopment Area Plans, Presentation by 44 DSU/Bonestroo 45 46 Community Development Director Ericson explained that the Authority authorized Bonestroo to 47 conduct a market analysis and market study of the Premium Stop property incorporating the 48 Roberts property all the way south to the Wooddale Drive intersection. He then said that the 49 Authority recognized that it made sense to determine what could be done with the site based on 50 the constraints of the site and asked Bonestroo to provide a study to help the City guide the 51 development of this site. 52 53 Director Ericson indicated that acting proactively will give developers and the City an idea of 54 what would be appropriate for the site rather than waiting for redevelopment to be proposed for 55 the site. 56 57 John Uban addressed the Authority and provided an overview of the market research and review 58 of the site. 59 60 Mr. Uban indicated that within the next three to five years the area will begin to develop and this 61 site could be used to leverage greater development opportunities. 62 63 Commissioner Flaherty said that he did not know that the City was going to include the Roberts 64 site in this report. 65 66 The Authority indicated that it was to be included. 67 68 President Marty asked about short-term development being limited to highway business and 69 listed them from the report. He then said that he was wondering about what types of retail and 70 what types of restaurants are being referred to because he thought the City commissioned this 71 study to have them go out and do a market analysis to determine what types of businesses would 72 fit what there is a market for in this area. 73 74 President Marty said that he felt that the purpose of the study was to determine what types of 75 businesses would fit the market so that the City could go out and solicit the types of businesses 76 that will work in this market. 77 78 Mr. Uban indicated that there is a need to start with a general overview of the possibilities rather 79 than limiting it before soliciting the market for potential. 80 81 Jay Demma said that the idea was to set this up as a neighborhood oriented concept that will 82 work on the site rather than a destination oriented project. He then said that to get to specifics of 83 the type of restaurant that might serve the local area would get involved in a scope of research 84 that would take a lot more time and money as you would have to get into the detail of focusing 85 Mounds View EDA December 11, 2006 Regular Meeting Page 3 on particular restaurant types and evaluate each and every type of potential restaurant. 86 87 President Marty said that allowing the market to respond makes the City reactive and the purpose 88 of the study was to allow the City to be proactive in determining what to place on this site. 89 90 Commissioner Thomas said that she was expecting that a market analysis would tell her if the 91 area should be commercial or a mixed-use development or should it be a neighborhood 92 development or destination type. She then said that being too specific would limit development 93 of the site. 94 95 Commissioner Gunn said that she was looking for this type of information to be used as a tool 96 where the City could market the area when someone comes to the City to develop a site. She 97 then said that development is reactive. 98 99 Jay Demma indicated that they would be happy to expand the study should the City determine 100 that is necessary. 101 102 John Slack walked the Authority through the planning study and provided a general overview of 103 the market study. 104 105 Mr. Slack indicated that the EDA is 1.5 acres of the total redevelopment area. 106 107 Mr. Slack indicated that site ownership is an issue for the site as there are 12 property owners. 108 He then said that they looked at creating a plan that responds to development over time as parcels 109 become available. 110 111 Mr. Slack defined the goals in this redevelopment process and reviewed them with the Authority. 112 113 Mr. Slack reviewed the Concept A specifics with the Authority. He then reviewed Concept B 114 noting that the development time frame for this concept would be one to three years. 115 116 Commissioner Thomas asked what would make this site more attractive. 117 118 Mr. Slack trails for the office employees to use along with synergy of the site and other potential 119 uses that occur here and on other parts of the site to allow people to do more than one errand at 120 one time in this location. 121 122 Mr. Uban said that bringing that building right up to the roadway will strengthen the site and 123 makes it more attractive and it will slow traffic to bring commerce to a Main Street type of 124 development. He then said that a two-story office would cement this type of redevelopment 125 concept. 126 127 Mounds View EDA December 11, 2006 Regular Meeting Page 4 Mr. Slack indicated that Concept A has a small trail connection and with Concept B the trail 128 remains to bring people from the residential area to this area to conduct their business. 129 130 Mr. Slack reviewed the details of Concept C with the Authority and it shows a three story 131 building of potentially senior condos to reinforce the corner with about 40 units with 132 underground parking and then a transition into a residential area of townhomes. 133 134 Mr. Slack indicated that the trail system would be improved with this concept and sidewalks 135 would be added. 136 137 Mr. Slack reviewed Concept C2 noting that the first site is the car wash area and said that the 138 County Road 10 improvements are being brought into the property sites and used as a selling 139 point for redeveloping sites along this corridor. 140 141 Mr. Slack provided an overview of Concept D for the Authority noting that the oak trees are a 142 beautiful asset to the area and impact to them was minimized as much as possible. He then said 143 that there is a proposed three story building with approximately 60 units for higher end condos or 144 perhaps senior housing with underground parking and brining in a residential use of townhomes 145 to transition to the existing residential neighborhood. 146 147 Mr. Slack reviewed the final redevelopment Concept noting that it shows the potential for a 148 bigger office building setback from the street and maintaining the existing trees. 149 150 Mr. Slack provided information on what may happen if the roads were reconstructed. He then 151 said that by closing Greenfield at County Road 10 it creates the opportunity to create some larger 152 uses or larger buildings that really enforce the corner. 153 154 Mr. Slack reviewed the site design guidelines and implementation of the plan noting they would 155 like to create an overlay district for this site area to allow the City to set guidelines and standards 156 for how the area will be developed. 157 158 Vice President Stigney thanked Bonestroo for the interesting concepts. He then said that he is 159 concerned with senior condos being at that busy intersection. 160 161 Vice President Stigney asked if there are any cost estimates for the City to consider with these 162 concept plans. 163 164 Mr. Slack indicated that he could provide preliminary acquisition and development costs for the 165 City. 166 167 Vice President Stigney indicated that he would like to know additional City costs for developing 168 the concept plans. 169 Mounds View EDA December 11, 2006 Regular Meeting Page 5 170 Mr. Slack indicated that he would provide a list of costs for the Authority to review. 171 172 Mr. Slack indicated that he was looking to reinforce the corner with the senior housing but can 173 look at other options. 174 175 Commissioner Flaherty indicated that he was against this study until he realized that the real 176 value will be for the contractor and he would like to deal with what the City has and the point 177 was to purchase the property to eliminate a blight but he would like to move on what can be done 178 with the site owned by the City. 179 180 Commissioner Flaherty indicated that a small town feel is not possible with a 50 m.p.h. corridor. 181 He then said that the only single family homes being considered in the last few years were for 182 Hidden Hollow so he would like to limit discussion of townhome development and focus on 183 single family homes. 184 185 Commissioner Thomas said that she likes the idea of the PUD overlay and she thinks that the 186 balance will be found in making sure that the restrictions placed on it does not reduce the 187 potential for development coming in. She then said that too much restriction means the benefits 188 of the overlay are lost. She further said that she likes the phasing of the redevelopment to allow 189 it to happen over time without forcing it and allow the City to focus on the piece the city owns. 190 191 President Marty asked whether the City can control the building types, architecture, and design 192 styles by doing the PUD overlay and not limiting potential redevelopment. 193 194 Community Development Director Ericson indicated that the PUD and an overlay would allow 195 Staff to control development on the site. 196 197 President Marty indicated that this was a good report but it was not what he had expected. 198 199 Director Ericson suggested that if there is general support to move forward with the plan Staff 200 would plan to present this to the neighborhood to receive feedback from the community and 201 those neighbors that would be most impacted. 202 203 President Marty recessed the EDA meeting at 7:00 p.m. 204 205 8. REPORTS 206 207 None. 208 209 9. NEXT EDA MEETING: Monday, January 8, 2007 at 6:30 p.m. 210 211 Mounds View EDA December 11, 2006 Regular Meeting Page 6 10. ADJOURNMENT 212 213 President Marty adjourned the meeting at xx:xx p.m. 214 215 Respectfully submitted, 216 217 218 Recorded and transcribed by: 219 Joan Lenzmeier, Recording Secretary 220 TimeSaver Off Site Secretarial, Inc. 221 222 M:\MasterFiles\1999 thru 2010\2007\EDA\EDA Packets\01-08-07\Item 07B Attachment 1TIF Policy Updated 6-12-00 (Revised Signatures).doc City of Mounds View Economic Development Authority Tax Increment Financing Policy & Application Adopted: 5/12/97 Revised: June 12, 2000 2 Table of Contents I. General Policy 3 II. Projects Eligible for Tax Increment Financing 3 III. Costs Eligible for Tax Increment Financing 3 IV. Determination of the Amount of Assistance to the Applicant 4 V. Type of Assistance 4 VI. Establishing a Tax Increment Finance District 5 VII. Administration, Pooled Funds, and Parcel Decertification 5 VIII. Application Process 6 IX. Attachment A: Application for Tax Increment Finance 7 X. Attachment B: Deposit Agreement 11 XI. Attachment C: Application Proposal Review Worksheet 14 XII. Sample But-For Analysis 16 3 I. GENERAL POLICY: The Mounds View Economic Development Authority has the powers under the Minnesota Statute Sections 469.124 through 469.137 and sections 469.001 through 469.047 to govern and monitor the use of tax increment financing for Mounds View’s tax increment districts and the Mounds View development district which encompasses the entire boundaries of the City of Mounds View. It is the responsibility of the Mounds View Economic Development Authority to use tax increment financing as a tool to accomplish the City’s economic development and redevelopment goals and objectives. The Mounds View Economic Development Authority understands and abides by the fundamental principal which makes tax increment financing viable to encourage development and redevelopment which would otherwise not occur. The Mounds View Economic Development Authority shall consider tax increment financing in cases that serve to accomplish the City’s development goals and activities as hereby defined in projects eligible for tax increment financing. II. PROJECTS ELIGIBLE FOR TAX INCREMENT FINANCING: Projects eligible for consideration of Tax Increment Financing assistance per the Mounds View Development Project Plan dated May 9, 1994 include, but are not limited to (1) the attraction, retention, rehabilitation and preservation of commercial, industrial, retail, residential, recreational and public service facilities; (2) new and rehabilitated public infrastructure; (3) community and other public service centers; (4) senior/mature adult and/or other housing development partnerships or other multi-use housings projects and facilities; (5) other public utilities (including telecommunications); (6) business incubator loan and other business programs; and (7) transportation systems. More emphasis will be placed on those items which increase the tax base, eliminate blight, and the meet the City’s economic and redevelopment goals. III. COSTS ELIGIBLE FOR TAX INCREMENT FINANCING: Project costs qualifying for Tax Increment Financing assistance, as defined under the TIF Act, include utilities design, architectural and engineering fees directly attributable to site work, site related permits, earthwork/excavation, soils correction, landscaping, utilities (sanitary sewer, storm sewer, and water), streets and roads, street/parking lot paving, street/parking lot lights, curb and gutter, sidewalks, land acquisition, special assessment, legal (relating to acquisition, financing, and closing fees), soils tests and environmental studies, surveys, park dedication fee, SAC, WAC, charges, titles insurance and TIF application deposit. IV. DETERMINATION OF AMOUNT OF ASSISTANCE TO APPLICANT: Within TIF Districts The amount of Tax Increment Financing provided to an applicant will be based, in part, on the analysis of information provided on the application for Tax Increment Financing assistance (Attachment “A”), amount of increment generated by the project as evaluated by the City’s Financial and/or Bond Counsel and the City’s economic and redevelopment goals. The level of assistance provided will be evaluated on a case by case basis and may reflect an increase or decrease in assistance dependent upon the level of increase in the tax base, amount of elimination of blight and/or a number of variables that may substantiate the need for assistance. An adjustment in the amount of assistance that can be provided is at the sole discretion of the Board of the Economic Development Authority as long as the requested uses are legal under the Minnesota State Statutes for the use of tax increment financing. Within the Development District (herein referred to as the “City” limits) but outside of TIF Districts The evaluation of Tax Increment Financing assistance that could be provided to an applicant will be based on (A) the analysis of information provided on the application for Tax Increment Finance assistance (Attachment “A”), (B) square footage cost of the project, (C) balance available in the Economic Development Authority excess tax increment fund and (D) proof of need for assistance under the “but for” test for use of tax increment financing. See Attachment D for a sample “but for” analysis. 4 V. TYPES OF ASSISTANCE: Within TIF Districts Tax Increment Financing can be provided in either “pay as you go” or “up front” payments. “Pay as you go” is wherein the Mounds View Economic Development Authority compensates the applicant an amount equal to a predetermined percentage of the actual increment produced by the project for a predetermined number of years. The applicant pays for the (re)development up front and then annual payments are issued to the applicant based on the need for assistance and increment generated from the project. “Up front” payments is wherein the Mounds View Economic Development Authority must issue revenue or general obligation bonds to pay for the (re)development prior to the completion of the project. The increment from the project is then used for repayment of the bonds. The Mounds View Economic Development Authority gives preference to the use of “pay as you go” assistance to finance private development projects due to the reduced risk to the community. The EDA will consider “up front” payment projects that would benefit the entire community and are not possible to be funded under a “pay as you go” basis. Within the City but outside of TIF Districts Financing from the dedicated tax increment fund can be provided in annual installments to the applicant based on the positive cash flow balance in the Economic Development Authority’s dedicated tax increment fund and need for assistance based on analysis of the “but for” test for the project. The dedicated tax increment fund includes a value based on the use and is adjusted along with the budget process and goals and objectives for economic and redevelopment on an annual basis. VI. ESTABLISHING A TAX INCREMENT FINANCE DISTRICT: New tax increment finance districts in the City of Mounds View will be established in accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan, and the Development District Plan. VII. ADMINISTRATION, POOLED FUNDS & PARCEL DECERTIFICATION: Administration Tax Increment Finance districts will be administered in accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan, and the Development District Plan. Pooled Funds Pooled funds are available when the current years increment exceeds existing obligations. In the past, funds have been allocated for low interest improvement loans, housing replacement, and Highway 10 redevelopment. The Mounds View Economic Development Authority will address the future use of pooled funds in the following manner: (1) view tax increment as a means secondary to programmatic objectives; (2) allocate all available pooled increment; and (3) the Economic Development Commission and Economic Development Authority decides on future development needs and uses TIF and/or other means to accomplish those ends. (4) in the event that the Economic Development Authority determines pooled increment should be returned to the respective taxing jurisdictions, the Economic Development Commission will evaluate the potential action and make a recommendation to the Economic Development Authority. To more effectively utilize pooled increment, the Economic Development Commission will recomm end funding priorities to the Economic Development Authority. This will be done in conjunction with the annual budgetary process. At this time, potential parcels for decertification will also be examined Requests made for the use of pooled funds by a business or developer outside established TIF districts are discussed in sections IV and V. Parcel Decertification Parcels in Mounds View’s Tax Increment Finance districts will be decertified as required by and in accordance with applicable Minnesota State Statutes, the Development District Plan, and the TIF Plans as 5 amended. In the event that the Economic Development Authority desires to return pooled increment to the respective taxing jurisdictions, the following guidelines will be observed: (1) reserves should be greater than or equal to next years projected increment; and (2) prior to disbursing pooled funds to the respective taxing jurisdictions, the Economic Development Authority will consider future projects and community needs. (3) in the event that parcels are going to be decertified, the Economic Development Commission will evaluate the potential action and make a recommendation to the Economic Development Authority. VIII. APPLICATION PROCESS: The following delineates the Mounds View Economic Development Authority’s application process for Tax Increment Financing assistance: 1. Applicant submits the completed application (Attachment “A”) and Deposit Agreement (Attachment “B”) along with all application fees. 2. City staff reviews the application and completes the Application Review Worksheet (Attachment “C”). 3. Results of the Worksheet are submitted to the appropriate governing authorities for preliminary approval of the proposal. 4. If preliminary approval is granted, a development agreement, business subsidy agreement, and amendments to the Tax Increment Financing Plan, along with all necessary notices, resolutions and certificates are prepared by City staff and/or consultants. 5. If applicable, notices are published and sent to the county and school board. 6. If necessary, public hearing(s) on the proposed project are held. 7. The Economic Development Authority considers final approval of the proposal. 6 IX. Attachment A: APPLICATION FOR TAX INCREMENT FINANCING A. APPLICANT INFORMATION Name of Corporation/Partnership Address Primary Contact Address Phone Fax Email On a separate sheet, please provide the following: • Brief description of the corporation/partnership’s business, including history, principal product or service, etc… Attach as Exhibit A . • Brief description of the proposed project. Attach as Exhibit B. • List names of officers and shareholders/partners with more than five percent (5%) interest in the corporation/partnership. Attach as Exhibit C. • A but-for analysis. Attach as Exhibit D. Attorney Name Address Phone Fax Email Accountant Name Address Phone Fax Email Contractor Name Address Phone Fax Email Engineer Name Address Phone Fax Email Architect Name Address Phone Fax Email 7 B. PROJECT INFORMATION The project will be: ____Vacant Land Development ____New Construction ____ Expansion ____Commercial Redevelopment: ____New Construction ____ Expansion ____Industrial Redevelopment: ____New Construction ____ Rehabilitation ____Housing: ____New Construction ____ Rehabilitation ____Other The project will be: ___Owner Occupied ____Leased Space If leased space, please attach a list names and addresses of future lessees and indicate the status of commitments or lease agreements. Attach as Exhibit E. Project Address Legal Description Site Plan Attached: ____ Yes ____ No Building Square Footage: Number of Units if Applicable: Amount of Tax Increment Requested: Land $ Public Improvement $ Site Improvement $ Current Real Estate Taxes on Project Site: $ Estimated Real Estate Taxes upon Completion: $ Construction Start Date: Construction Completion Date: If Phased Project: Year % Completed Year % Completed C. PUBLIC PURPOSE It is the policy of the City of Mounds View that the use of Tax Increment Financing should result in a benefit to the public. Please indicate how this project will serve a public purpose. ___Job Creation: Number of existing jobs Number of jobs created by project Average hourly wage of jobs created ___New industrial development which will result in additional private investment in the area. ___The project contributes to the fulfillment of the City’s economic development and redevelopment goals ___Removal of blight. ___Rehabilitation of a high profile or priority site. ___Provision of Low and Moderate Income Housing. ___Other: 8 D. SOURCES & USES SOURCES NAME AMOUNT Bank Loan $ Other Private Funds $ Equity $ Fed Grant/Loan $ State Grant/Loan $ Tax Increment $ ID Bonds $ Other $ TOTAL $ USES AMOUNT Land Acquisition $ Site Development $ Construction $ Machinery & Equipment $ Architectural & Engineering Fees $ Legal Fees $ Interest During Construction $ Debt Service Reserve $ Contingencies $ Other $ TOTAL $ 9 E. ADDITIONAL DOCUMENTATION Applicants will also be required to provide the following documentation. ______A) Written business plan, including a description of the business, ownership/management, date established, products and services, and future plans B) Financial Statements for Past Three Years Profit & Loss Statement Balance Sheet C) Current Financial Statements Profit & Loss Statement to Date Balance Sheet to Date _______D) Two Year Projections F) Personal Financial Statements of all Major Shareholders if “Up Front” Financing is Requested Profit & Loss Current Tax Return _______G) Letter of Commitment from Applicant Pledging to Complete during the proposed project duration H) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project _ I) Application fee of $5000 _____J) Additional information that will be helpful in evaluating your application Note: All Major shareholders will be required to sign personal guarantees if up front financing of the project is required. The undersigned certifies that all information provided in this application is true and correct to the best of the undersigned’s knowledge. The undersigned authorizes the Mounds View Economic Development Authority to check credit references and verify financial and other information. The undersigned also agrees to provide any additional information as may be requested by the Authority after the filing of this application. Applicant Name Date By Its 10 X. Attachment B: Deposit Agreement Deposit Agreement for Evaluation of Tax Increment Assistance By and Between the Mounds View Economic Development Authority and (The Applicant) This agreement made as of the day of , 2005 by and between the MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic, organized and existing under the laws of the State of Minnesota (the “EDA”) and (“The Applicant”). WITNESSETH: WHEREAS, the EDA has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the “Act”); and WHEREAS, pursuant to and in furtherance of the objectives of the Act, the EDA has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in connection is engaged in carrying out the Mounds View Economic Development Project as detailed in EDA document dated 5/9/94 (the “Project”) within the City; and WHEREAS, the redevelopment and development of property within the Project by private developers are stated objectives of the Project Plan. NOW THEREFORE, in consideration of a mutual covenants made herein and for other good and valuable consideration set forth in the Agreement, the parties agree as follows: Section 1. (The Applicant ) agrees to provide the EDA with a deposit of $5,000 for the EDA’s consultants to investigate the feasibility of providing Tax Increment Financing assistance to (The Applicant) for the redevelopment of the (the “Property”). If the EDA incurs additional expenses directly related to the feasibility of providing Tax Increment Assistance to (The Applicant) beyond the $5,000, prior to the execution of the Developer’s Agreement, the EDA shall notify (The Applicant) in writing and (The Applicant) will be required to deposit additional funds as a condition of the EDA entering into any such Development Agreement. Section 2. If the project is approved and (The Applicant) proceeds with the project, the EDA shall reimburse (The Applicant)’s deposit to the extent permissible under the TIF Act. If (The Applicant) does not proceed with the redevelopment of the Property due to the decision of either the EDA or (The Applicant), the EDA shall reimburse the applicant for the unused portion of the deposit. Section 3. Nothing contained in this agreement shall in any way obligate either party to proceed with the redevelopment of the Property or otherwise enter into a Development Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 11 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY BY: Rob Marty ITS PRESIDENT BY: Kurt Ulrich ITS EXECUTIVE DIRECTOR STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 2005, by Rob Marty and Kurt Ulrich, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. Notary Public 12 (The Applicant) BY: ITS: STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 2000, by , the of (The Applicant) named in the foregoing instrument. Notary Public 13 XI. Attachment C: APPLICATION PROPOSAL REVIEW WORKSHEET REDEVELOPMENT DISTRICT 1. Ratio of Private to Public Investment in Project: Points: $ Private investment 4:1 5 $ Public Investment 3:1 4 Ratio of Private to Public Financing 2:1 3 1:1 2 Less than 1:1 1 2. Increase in Real Estate Value: Points: $ Value of Site before redevelopment 1:5+ 5 $ Value of site after redevelopment 1:4 4 $ Ratio of value before:after redevelopment 1:3 3 1:2 2 Less than 1:2 1 3. New Job Creation in the City of MoundsView: Points: Number of net new jobs as a result of the project. 50+ 5 Number of existing/retained jobs divided by 10. 30+ 4 Total 25+ 3 15+ 2 Less than 15 1 4. Ratio of TIF to new jobs created: Points: $ TIF request $15,000 or less 5 Number of new jobs created $20,000 or less 4 $ of TIF per new job created $22,000 or less 3 $25,000 or less 2 Over $25,000 1 5. Wage Level of jobs created: Points: Average hourly wage Over $21/ hour 5 of jobs created: $18 –21 / hour 4 $14-17 / hour 3 $10-13 / hour 2 Under $10 / hour1 6. Project size: Points: The project will result in a net square Over 100,000 5 footage of 80,000+ 4 60,000+ 3 40,000+ 2 40,000 or less 1 14 7. Type of Project: Points: 100% Owner Occupied 5 Mix Owner Occupied & Investment 4 Investment Property 3 8. Use: Points: Industrial 5 Warehouse/Distribution 4 Commercial 3 Housing 3 9. The project will pay annual Points: property taxes in the first fully assessed 120,000+ 5 year of $ 80,000+ 4 60,000+ 3 40,000+ 2 20,000+ 1 Below 20,000 0 10. Likelihood that the project will result in Points: unsubsidized, spin-off development. High 5 Moderate 3 Low 1 11. Bonus Points Bonus Points: The project will be 100% pay-as-you-go TIF. 3 points The project contributes to Highway 10 Redevelopment 3 points Total Points: Overall project analysis: High 50-43 points Moderate 42-34 points Low 33-26 points Not Eligible 25-0 points Sub - Total Points: of a possible 50 points. 15 XII. ATTACHMENT D: SAMPLE BUT-FOR ANALYSIS WITHOUT WITH TAX INCREMENT FINANCING TAX INCREMENT FINANCING SOURCES AND USES SOURCES AND USES SOURCES SOURCES Mortgage 9,600,000 8,667,000 Equity 2,400,000 2,400,00 Tax Increment Financing 0 933,000 TOTAL SOURCES 12,000,000 12,000,000 USES USES Land 1,500,000 1,500,000 Site Work 300,000 300,000 Soil Correction 468,000 468,000 Demolition 100,000 100,000 Relocation 65,000 65,000 Subtotal Land Costs 2,433,000 2,433,000 Construction 6,750,000 6,750,000 Finish Manufacturing 250,000 250,000 Subtotal Construction Costs 7,000,000 7,000,000 Soft Costs 350,000 350,000 Taxes 35,000 35,000 Finance Fees 850,000 850,000 Project Manager 542,000 542,000 Developer Fee 540,000 540,000 Contingency 250,000 250,000 Subtotal Soft Costs 2,567,000 2,567,000 TOTAL USES 12,000,000 12,000,000 Income Statement Income Statement Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft. Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000 Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500 Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000 Other 0 $0.00 0 0 $0.00 0 1,237,500 1,237,500 Mortgage 20 Term 1,051,646 20 Term 949,439 9.00% Interest 9.00% Interest 9,600,000 Principal 8,667,000 Principal Net Income 185,854 288,061 Total Return on Equity 7.74% 12.00% N:\DATA\GROUPS\ECONDEV\TIF\Policy.DOC City of Mounds View Economic Development Authority Tax Increment Financing Policy & Application Adopted: 5/12/97 Revised: June 12, 2000 Draft Revision: December 15, 2006 \\Trout\CommDev\Economic Development\TIF\Policy\TIF Policy Draft Revision 12-15-06.doc 2 Table of Contents I. General Policy Purpose 3 II. Projects Eligible for Tax Increment Financing 3 III. Costs Eligible for Tax Increment Financing 3 IV. Determination of the Amount of Assistance to the Applicant 4 V. Type of Assistance 4 VI. Establishing a Tax Increment Finance District 5 VII. Administration, Pooled Funds, and Parcel Decertification 5 VIII. Application Process 6 IX. Attachment A: Application for Tax Increment Financeing Application 7 X. Exhibits A. Attachment B: Deposit Application Fee Agreement 11 B. Attachment C: Application Proposal Review Worksheet 14 C. Sample But-For Analysis 16 3 I. GENERAL POLICY PURPOSE: The Mounds View Economic Development Authority (EDA) has the powers under the Minnesota Statute Sections 469.124 through 469.137 and sections 469.001 through 469.047 to govern and monitor the use of tax increment financing for Mounds View’s tax increment districts and the Mounds View development district which encompasses the entire boundaries of the City of Mounds View. It is the responsibility of the Mounds View Economic Development Authority to use tax increment financing as a tool to accomplish the City’s economic development and redevelopment goals and objectives. The Mounds View Economic Development Authority understands and abides by the fundamental principal principle which makes tax increment financing viable to encourage development and redevelopment which would otherwise not occur. The Mounds View Economic Development Authority shall consider tax increment financing in cases that serve to accomplish the City’s development goals and activities as hereby defined in projects eligible for tax increment financing. The Mounds View EDA has determined that it is advisable and in the best interest of the City to adopt a policy relating to Tax Increment Financing (TIF) for private development. It is intended that this policy not be construed as exclusive but instead to provide general guidelines for addressing TIF in the City and, in adopting this policy, the EDA acknowledges that special cases may be required based on the particular facts present in any given situation and the proposed development or redevelopment would not reasonably be expected to occur solely through private development within the foreseeable future. It is the policy of the City of Mounds View to consider the judicious use of Tax Increment Financing (TIF) for those projects which demonstrate a public benefit by constructing public improvements in support of developments that will: create new jobs, retain existing employment, eliminate blight, strengthen the economic base of the City, increase property values and tax revenues, create economic stability, and expansion of business and housing options in the City. II. PROJECTS ELIGIBLE FOR TAX INCREMENT FINANCING: Projects eligible for consideration of Tax Increment Financing assistance per the Mounds View Development Project Plan dated May 9, 1994 include, but are not limited to (1) the attraction, retention, rehabilitation and preservation of commercial, industrial, retail, residential, recreational and public service facilities; (2) new and rehabilitated public infrastructure; (3) community and other public service centers; (4) senior/mature adult and/or other housing development partnerships or other multi-use housings projects and facilities; (5) other public utilities (including telecommunications); (6) business incubator loan and other business programs; and (7) transportation systems. More emphasis will be placed on those items which increase the tax base, eliminate blight, and the meet the City’s economic and redevelopment goals. III. COSTS ELIGIBLE FOR TAX INCREMENT FINANCING: Project costs qualifying for Tax Increment Financing assistance, as defined under the TIF Act, include utilities design, architectural and engineering fees directly attributable to site work, site related permits, earthwork/excavation, soils correction, landscaping, utilities (sanitary sewer, storm sewer, and water), streets and roads, street/parking lot paving, street/parking lot lights, curb and gutter, sidewalks, land acquisition, special assessment, legal (relating to acquisition, financing, and closing fees), soils tests and environmental studies, surveys, park dedication fee, SAC, WAC, charges, titles insurance and TIF application deposit. IV. DETERMINATION OF AMOUNT OF ASSISTANCE TO APPLICANT: Within TIF Districts The amount of Tax Increment Financing provided to an applicant will be based, in part, on the analysis of information provided on the application for Tax Increment Financing assistance (Attachment “A”), amount of increment generated by the project as evaluated by the City’s Financial and/or Bond Counsel and the City’s economic and redevelopment goals. The level of assistance provided will be evaluated on a case by case basis and may reflect an increase or 4 decrease in assistance dependent upon the level of increase in the tax base, amount of elimination of blight and/or a number of variables that may substantiate the need for assistance. An adjustment in the amount of assistance that can be provided is at the sole discretion of the Board of the Economic Development Authority as long as the requested uses are legal under the Minnesota State Statutes for the use of tax increment financing. Within the Development District (herein referred to as the “City” limits) but outside of TIF Districts The evaluation of Tax Increment Financing assistance that could be provided to an applicant will be based on (A) the analysis of information provided on the application for Tax Increment Finance assistance (Attachment “A”), (B) square footage cost of the project, (C) balance available in the Economic Development Authority excess tax increment fund and (D) proof of need for assistance under the “but for” test for use of tax increment financing. See Attachment D Exhibit C for a sample “but for” analysis. V. TYPES OF ASSISTANCE: Within TIF Districts Tax Increment Financing can be provided in either “pay as you go” or “up front” payments. “Pay as you go” is wherein the Mounds View Economic Development Authority compensates the applicant an amount equal to a predetermined percentage of the actual increment produced by the project for a predetermined number of years. The applicant pays for the (re)development up front and then annual payments are issued to the applicant based on the need for assistance and increment generated from the project. “Up front” payments is wherein the Mounds View Economic Development Authority must issue revenue or general obligation bonds to pay for the (re)development prior to the completion of the project. The increment from the project is then used for repayment of the bonds. The Mounds View Economic Development Authority gives preference to the use of “pay as you go” assistance to finance private development projects due to the reduced risk to the community. The EDA will consider “up front” payment projects that would benefit the entire community and are not possible to be funded under a “pay as you go” basis. Within the City but outside of TIF Districts Financing from the dedicated tax increment fund can be provided in annual installments to the applicant based on the positive cash flow balance in the Economic Development Authority’s dedicated tax increment fund and need for assistance based on analysis of the “but for” test for the project. The dedicated tax increment fund includes a value based on the use and is adjusted along with the budget process and goals and objectives for economic and redevelopment on an annual basis. VI. ESTABLISHING A TAX INCREMENT FINANCE DISTRICT: New tax increment finance districts in the City of Mounds View will be established in accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan, and the Development District Plan. VII. ADMINISTRATION, POOLED FUNDS & PARCEL DECERTIFICATION: Administration Tax Increment Finance districts will be administered in accordance with applicable Minnesota State Statutes, the Tax Increment Finance Plan, and the Development District Plan. Pooled Funds Pooled funds are available when the current years increment exceeds existing obligations. In the past, funds have been allocated for low interest improvement loans, housing replacement, and Highway 10 redevelopment. The Mounds View Economic Development Authority will address the future use of pooled funds in the following manner: (1) view tax increment as a means secondary to programmatic objectives; (2) allocate all available pooled increment; and (3) the Economic Development Commission and Economic Development Authority decides on future development needs and uses TIF and/or other means to accomplish those ends. (4) in the event that the Economic Development Authority determines pooled increment should be returned to the respective taxing jurisdictions, the Economic Development Commission will evaluate the potential action and make a recommendation to the Economic Development 5 Authority. To more effectively utilize pooled increment, the Economic Development Commission will recommend funding priorities to the Economic Development Authority. This will be done in conjunction with the annual budgetary process. At this time, potential parcels for decertification will also be examined Requests made for the use of pooled funds by a business or developer outside established TIF districts are discussed in sections IV and V. Parcel Decertification Parcels in Mounds View’s Tax Increment Finance districts will be decertified as required by and in accordance with applicable Minnesota State Statutes, the Development District Plan, and the TIF Plans as amended. In the event that the Economic Development Authority desires to return pooled increment to the respective taxing jurisdictions, the following guidelines will be observed: (1) reserves should be greater than or equal to next years projected increment; and (2) prior to disbursing pooled funds to the respective taxing jurisdictions, the Economic Development Authority will consider future projects and community needs. (3) in the event that parcels are going to be decertified, the Economic Development Commission will evaluate the potential action and make a recommendation to the Economic Development Authority. VIII. APPLICATION PROCESS: The following delineates the Mounds View Economic Development Authority’s application process for Tax Increment Financing assistance: 1. Applicant submits the completed Tax Increment Financing Application (Attachment “A”) and Deposit Application Fee Agreement (Attachment “B” Exhibit A) along with all a non-refundable $5,000 application fees. The application fee will be used toward the cost of professional or technical services provided in the evaluation of the application, and legal costs incurred by the City for preparation of legal documents. If the EDA incurs additional expenses directly related to the evaluation of the application, or for professional or legal services beyond the $5,000, the EDA shall notify the applicant in writing and the applicant will be required to deposit additional funds. 2. City staff reviews the application and completes the Application Review Worksheet (Attachment “C”) Exhibit B. 3. Results of the Worksheet are submitted to the appropriate governing authorities for preliminary approval of the proposal. 4. If preliminary approval is granted, a development agreement, business subsidy agreement, and amendments to the Tax Increment Financing Plan, along with all necessary notices, resolutions and certificates are prepared by City staff and/or consultants. 5. If applicable, notices are published and sent to the county and school board. 6. If necessary, public hearing(s) on the proposed project are held. 7. The Economic Development Authority considers final approval of the proposal. 6 IX. Attachment A: APPLICATION FOR TAX INCREMENT FINANCING A. APPLICANT INFORMATION Name of Corporation/Partnership Address Primary Contact Address Phone Fax Email On a separate sheet, please provide the following: • Brief description of the corporation/partnership’s business, including history, principal product or service, etc…. Attach as Exhibit A. • Brief description of the proposed project. Attach as Exhibit B. • List names of officers and shareholders/partners with more than five ten percent (10.05%) interest in the corporation/partnership. Attach as Exhibit C. • A but-for analysis. Attach as Exhibit D. Attorney Name Address Phone Fax Email Accountant Name Address Phone Fax Email Contractor Name Address Phone Fax Email Engineer Name Address Phone Fax Email Architect Name Address Phone Fax Email 7 B. PROJECT INFORMATION The project will be: ____Vacant Land Mixed Use Development ____New Construction ____ Rehab./Expansion ____Commercial Redevelopment: ____New Construction ____ Rehabilitation/Expansion ____Industrial Redevelopment: ____New Construction ____ Rehabilitation/Expansion ____Housing: ____New Construction ____ Rehabilitation/Expansion ____Other The project will be: ___Owner Occupied ____Leased Space If leased space, please attach a list names and addresses of future lessees and indicate the status of commitments or lease agreements. Attach as Exhibit E. Project Address Legal Description Site Plan Attached: ____ Yes ____ No Building Square Footage: Number of Units if Applicable: Amount of Tax Increment Requested: Land $ Public Improvement $ Site Improvement $ Current Market Value of Project Site: $ Estimated Market Value upon Completion: $ Current Real Estate Taxes on Project Site: $ Estimated Real Estate Taxes upon Completion: $ Construction Start Date: Construction Completion Date: If Phased Project: Year % Completed Year % Completed C. PUBLIC PURPOSE It is the policy of the City of Mounds View that the use of Tax Increment Financing should result in a benefit to the public. Please indicate how this project will serve a public purpose. ___Job Creation: Number of existing jobs Number of jobs created by project Average hourly wage of jobs created ___New industrial development which will result in additional private investment in the area. ___The project contributes to the fulfillment of the City’s economic development and redevelopment goals ___Removal of blight. ___Rehabilitation of a high profile or priority site. ___Provision of Low and Moderate Income Housing. ___Other: 8 D. SOURCES & USES SOURCES NAME AMOUNT Bank Loan $ Other Private Funds $ Equity $ Fed Grant/Loan $ State Grant/Loan $ Tax Increment $ ID Bonds $ Other $ TOTAL $ USES AMOUNT Land Acquisition $ Site Development $ Construction $ Machinery & Equipment $ Architectural & Engineering Fees $ Legal Fees $ Interest During Construction $ Debt Service Reserve $ Contingencies $ Other $ TOTAL $ 9 E. ADDITIONAL DOCUMENTATION Applicants will also be required to provide the following documentation. ______A) Written business plan, including a description of the business, ownership/management, date established, products and services, and future plans _______B) Financial Statements for Past Three Years Profit & Loss Statement Balance Sheet _______C) Current Financial Statements Profit & Loss Statement to Date Balance Sheet to Date _______D) Two Year Financial Projections, including Profit & Loss, Balance Sheet, Cash Flow Statement. Please list assumptions, inc. estimated personnel levels and sales growth. _______F) Personal Financial Statements of all Major Shareholders with a 10.0% or greater ownership interest if “Up Front” Financing is Requested Profit & Loss Current Tax Return _______G) Letter of Commitment from Applicant Pledging to Complete during the proposed project duration H) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project _ I) Application fee of $5,000 _____J) Additional information that will be helpful in evaluating your application Note: All Major shareholders will be required to sign personal guarantees if up front financing of the project is required. The undersigned certifies that all information provided in this application is true and correct to the best of the undersigned’s knowledge. The undersigned authorizes the Mounds View Economic Development Authority to check credit references and verify financial and other information. The undersigned also agrees to provide any additional information as may be requested by the Authority after the filing of this application. Applicant Name Date By Its 10 X. Exhibits Attachment Exhibit A B: Deposit Application Fee Agreement Deposit Agreement for Evaluation of Tax Increment Assistance By and Between the Mounds View Economic Development Authority and (The Applicant) This agreement made as of the day of , 2005 by and between the MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic, organized and existing under the laws of the State of Minnesota (the “EDA”) and (“The Applicant”). WITNESSETH: WHEREAS, the EDA has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the “Act”); and WHEREAS, pursuant to and in furtherance of the objectives of the Act, the EDA has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in connection is engaged in carrying out the Mounds View Economic Development Project as detailed in EDA document dated 5/9/94 (the “Project”) within the City; and WHEREAS, the redevelopment and development of property within the Project by private developers are stated objectives of the Project Plan. NOW THEREFORE, in consideration of a mutual covenants made herein and for other good and valuable consideration set forth in the Agreement, the parties agree as follows: Section 1. (The Applicant ) agrees to provide the EDA with a deposit an application fee of $5,000 for the preparation of legal documents and for the EDA’s consultants to investigate the feasibility of providing Tax Increment Financing assistance to (The Applicant) for the redevelopment of the (the “Property”). If the EDA incurs additional expenses directly related to the feasibility of providing Tax Increment Assistance to (The Applicant), or for professional or legal services beyond the $5,000, prior to the execution of the Developer’s Agreement, the EDA shall notify (The Applicant) in writing and (The Applicant) will be required to deposit pay additional funds as a condition of the EDA entering into any such Development Agreement. Section 2. Regardless whether the project is approved by the EDA or not, the application fee is non-refundable. If the project is approved and (The Applicant) proceeds with the project, the EDA shall reimburse (The Applicant)’s deposit to the extent permissible under the TIF Act. If (The Applicant) does not proceed with the development or redevelopment of the Property due to the decision of either the EDA or (The Applicant), the EDA shall may reimburse the applicant for the unused portion of the deposit application fee. Section 3. Nothing contained in this agreement shall in any way obligate either party to proceed with the redevelopment of the Property or otherwise enter into a Development Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 11 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY BY: Rob Marty ITS PRESIDENT BY: Kurt Ulrich ITS EXECUTIVE DIRECTOR STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 200_5, by Rob Marty and Kurt Ulrich, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. Notary Public 12 (The Applicant) BY: ITS: STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 200_0, by , the of (The Applicant) named in the foregoing instrument. Notary Public 13 XI. Attachment EXHIBIT B C: APPLICATION PROPOSAL REVIEW WORKSHEET REDEVELOPMENT DISTRICT 1. Ratio of Private to Public Investment in Project: Points: $ Private investment 4:1 5 $ Public Investment 3:1 4 Ratio of Private to Public Financing 2:1 3 1:1 2 Less than 1:1 1 2. Increase in Real Estate Value: Points: $ Value of Site before redevelopment 1:5+ 5 $ Value of site after redevelopment 1:4 4 $ Ratio of value before:after redevelopment 1:3 3 1:2 2 Less than 1:2 1 3. New Job Creation in the City of MoundsView: Points: Number of net new jobs as a result of the project, or 50+ 5 Number of existing/retained jobs divided by 10. 30+ 4 Total 25+ 3 15+ 2 Less than 15 1 4. Ratio of TIF to new jobs created: Points: $ TIF request $15,000 or less 5 Number of new jobs created $20,000 or less 4 $ of TIF per new job created $22,000 or less 3 $25,000 or less 2 Over $25,000 1 5. Wage Level of jobs created: Points: Average hourly wage Over $21/ hour 5 of jobs created: $18 –21 / hour 4 $14-17 / hour 3 $10-13 / hour 2 Under $10 / hour1 6. Project size: Points: The project will result in a net square Over 100,000 5 footage of 80,000+ 4 60,000+ 3 40,000+ 2 40,000 or less 1 TO BE COMPLETED BY CITY STAFF 14 7. Type of Project: Points: 100% Owner Occupied 5 Mix Owner Occupied & Investment 4 Investment Property 3 8. Use: Points: Industrial/Commercial 5 Warehouse/Distribution 4 Commercial Office/Housing 3 Housing 3 9. The project will pay annual Points: property taxes in the first fully assessed 120,000+ 5 year of $ 80,000+ 4 60,000+ 3 40,000+ 2 20,000+ 1 Below 20,000 0 10. Likelihood that the project will result in Points: unsubsidized, spin-off development. High 5 Moderate 3 Low 1 11. Bonus Points Bonus Points: The project will be 100% pay-as-you-go TIF. 3 points The project contributes to Highway 10 Redevelopment 3 points Total Points: Overall project analysis: High 50-43 points Moderate 42-34 points Low 33-26 points Not Eligible 25-0 points Sub - Total Points: of a possible 50 points. 15 XI. ATTACHMENT EXHIBIT C D: SAMPLE BUT-FOR ANALYSIS WITHOUT WITH TAX INCREMENT FINANCING TAX INCREMENT FINANCING SOURCES AND USES SOURCES AND USES SOURCES SOURCES Mortgage 9,600,000 8,667,000 Equity 2,400,000 2,400,00 Tax Increment Financing 0 933,000 TOTAL SOURCES 12,000,000 12,000,000 USES USES Land 1,500,000 1,500,000 Site Work 300,000 300,000 Soil Correction 468,000 468,000 Demolition 100,000 100,000 Relocation 65,000 65,000 Subtotal Land Costs 2,433,000 2,433,000 Construction 6,750,000 6,750,000 Finish Manufacturing 250,000 250,000 Subtotal Construction Costs 7,000,000 7,000,000 Soft Costs 350,000 350,000 Taxes 35,000 35,000 Finance Fees 850,000 850,000 Project Manager 542,000 542,000 Developer Fee 540,000 540,000 Contingency 250,000 250,000 Subtotal Admin./Soft Costs 2,567,000 2,567,000 TOTAL USES 12,000,000 12,000,000 Income Statement Income Statement Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft. Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000 Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500 Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000 Other 0 $0.00 0 0 $0.00 0 1,237,500 1,237,500 Mortgage 20 Term 1,051,646 20 Term 949,439 9.00% Interest 9.00% Interest 9,600,000 Principal 8,667,000 Principal Net Income 185,854 288,061 Total Return on Equity 7.74% 12.00% \\Trout\CommDev\Economic Development\TIF\Policy\TIF Policy Draft Revision 12-15-06.doc Item No: 7B Meeting Date: January 8, 2007 Type of Business: EDA Administrator Review: _____ WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Mounds View Economic Development Authority From: Aaron Backman Item Title/Subject: Review the Mounds View Economic Development Authority’s Tax Increment Financing (TIF) Policy and Application and Consider Changes Background: Tax Increment Financing (TIF) is the City of Mounds View’s main economic development tool. Since 1986 TIF has been used by the City to assist businesses to locate or to expand in the community. What is TIF? It is the ability to capture and use all increased local property tax revenues from new development within a defined geographic area. Specific parcels of land are designated as part of a TIF District in order to capture value from the new development. Why use TIF? It encourages certain types of development or redevelopment that would not normally occur without assistance. TIF is intended to create jobs, redevelop blighted areas, remediate polluted sites, and add tax base. It is used to offset the eligible costs agreed to between a developer and the City (i.e. the EDA) under a development agreement. Eligible uses of TIF include land acquisition, demolition and site clearance, public utilities, parking, relocation, and administration. The Mounds View Economic Development Authority (EDA) adopted its current Tax Increment Financing (TIF) Policy and Application on June 12, 2000 (See attached document). During the past year the EDA requested that the Mounds View Economic Development Commission (EDC) look at the policy and bring it up to date. Over the past few months the EDC has been reviewing and updating the City’s TIF policy. The latest draft, dated December 15, 2006, is attached for your consideration. At the December meeting the EDC unanimously recommended approval by the EDA of the proposed changes to the TIF policy. Changes are shown in red with new language underlined and language to be removed doublestruck. The changes to the City’s TIF policy fall into two basic types: 1) greater clarification of the purpose of TIF, and 2) cleanup language that makes the policy more consistent with the City’s Tax Rebate (or Abatement) Finance Policy that was revised by the EDA on September 22, 2003. Recommendation: Staff seeks input from the M.V. Economic Development Authority on the City’s TIF Policy and on proposed changes that may be considered. It is anticipated that the Policy would be considered again later in January or February for further action. Respectfully submitted, ____________________________ Aaron Backman Economic Development Coordinator \\Trout\CommDev\Economic Development\EDA\Staff Reports\Staff Report EDA 07\Staff Report 1-8-07 EDA Item #7B Review TIF Policy & Changes.doc